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#2229441 - 01/22/20 08:18 PM What if the Product Name Contains a Trigger Term?
ItsJustMe Offline
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Posts: 298
New York
If the name of our line of credit is called "Interest Only LOC", does this require the trigger term disclosures, or is there anything that exempts us from having to provide the disclosures? The description of the product will NOT contain any trigger terms, only the name/title of the product.

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#2229449 - 01/22/20 09:10 PM Re: What if the Product Name Contains a Trigger Term? ItsJustMe
rlcarey Offline
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rlcarey
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Galveston, TX
What specific trigger term are you referring too? I am not aware that interest only is a trigger term on a standard line of credit.
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#2229452 - 01/22/20 09:38 PM Re: What if the Product Name Contains a Trigger Term? ItsJustMe
ItsJustMe Offline
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Joined: Dec 2009
Posts: 298
New York
For an open-end line of credit, or even a HELOC. As we understand it, 1026.16(d??) says that if an advertisement contains trigger terms affirmatively or negatively, such as the payment terms, (i.e. draw/repayment periods, length of the plan; “interest only”) the ad must include the additional open-end disclosures. But it is only he name of the product (Interest-only LOC) that contains the trigger, not the body of the ad.

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#2229573 - 01/24/20 02:17 PM Re: What if the Product Name Contains a Trigger Term? ItsJustMe
burkemi Offline
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I don't think "Interest Only" is a triggering term. We don't have the length of the interest only period, an example of how much a payment may be, or even the rate itself.

But to answer question of a triggering term in the name of the product - I would argue heavily that if this product is printed on a banner, billboard, flyer, etc, then the name itself IS an advertisement. After all, that is the purpose of the name, right? To grab your customers' or potential customers' attention.
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#2229574 - 01/24/20 02:34 PM Re: What if the Product Name Contains a Trigger Term? ItsJustMe
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
On a HELOC:

1026.16(d)(3) Balloon payment. If an advertisement contains a statement of any minimum periodic payment and a balloon payment may result if only the minimum periodic payments are made, even if such a payment is uncertain or unlikely, the advertisement also shall state with equal prominence and in close proximity to the minimum periodic payment statement that a balloon payment may result, if applicable.

If it is interest only, how can there not be a balloon payment due?
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#2229588 - 01/24/20 03:34 PM Re: What if the Product Name Contains a Trigger Term? ItsJustMe
burkemi Offline
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Joined: Nov 2013
Posts: 549
Good point.
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