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#52239 - 01/06/03 01:40 AM Advertising for Home Equity

Is "Get a tax break on next years taxes" a trigger term? I have received a draft for a Home Equity Line of Credit ad that has this phase and then states to apply online.

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General Discussion
#52240 - 01/06/03 02:25 AM Re: Advertising for Home Equity
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,590
On the Net
In Texas we don't have HELOCs but the criteria below are triggering terms for open end credit and you are no where close to these.

226.16 Advertising.
(b) Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under 226.6 is set forth in an advertisement, the advertisement shall also clearly and conspicuously set forth the following: 36d

(1) Any minimum, fixed, transaction, activity or similar charge that could be imposed.

(2) Any periodic rate that may be applied expressed as an annual percentage rate as determined under 226.14(b). If the plan provides for a variable periodic rate, that fact shall be disclosed.

(3) Any membership or participation fee that could be imposed.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#52241 - 01/06/03 12:00 PM Re: Advertising for Home Equity
JMB Offline
Joined: Mar 2002
Posts: 59
If you reference tax deductibility, you should add a phrase recommending that they consult their tax advisor. Reg Z Commentary 226.16 (d) (4) 3. states: An advertisement referring to deductibility for tax purposes is not misleading if it includes a statement such as "consult a tax advisor regarding the deductibility of interest."

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#52242 - 01/06/03 04:14 PM Re: Advertising for Home Equity
Jack Holzknecht Offline

Gold Star
Joined: Aug 2001
Posts: 330
Louisville, KY
Reg Z has special triggering terms for HELOCs (12CFR226.16(d)(1). Disclosing tax implications does not trigger any disclosures beyond what is cited in JMB's post.

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#52243 - 01/06/03 04:17 PM Re: Advertising for Home Equity
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
It is worth reminding your marketing staff that promoting the tax deductability of interest on HELOCs was one of the contributing catalysts to passage of these special HELOC rules. The wording described in the first post bothers me for that reason, even though it technically doesn't trigger. It definitely pushes the envelope. When banks do that, more regulation follows.

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