We are looking at offering a rate reduction (by a set # of basis points) on consumer installment loans if the consumer sets up automatic payments on the loan from a checking account at our bank. We have added the preferred rate language to the disclosure. Do we also need to include the phrase "The annual percentage rate does not take into account your required deposit"? 1026(18)(r) states that if a deposit is required, that must be disclosed. Does that apply if the bank requires a certain balance amount? O would requiring an account be opened for that rate cause that to apply?

No, you would have to take the deposit as collateral.