We are looking at sending current ARM customers,(loans are coming due), a solicitation letter with a special refinance offer. As long as we treat these as “personal” letters to our current customer do REG Z advertising guidelines still apply?

How would this not be an advertising for your special product offering?

If it has any triggering terms you will have to follow the advertising rules.

The letter would be to the individual customer with an offer to refinance their ARM loan currently on the books. The offer would be based on their adjustment date. The offer would be a lower rate with the next adjustment out 60 months versus every year. This would not be an advetised loan offering to the general public, simply coorespondence to our customer offering them a better rate and term in order to keep them wit the bank. The letters would be sent to customers who have loan adjustments coming in the next few months. I am just not sure if this type of "correspondence" must follow all the advertising regulations.

I'm still not sure how that would not meet the definition of an advertisement. An advertisement does not have to be in "mass" to qualify as an advertisement. From 226.2

(2) Advertisement means a commercial message in any medium that promotes, directly or indirectly, a credit transaction.

and from the Commentary;

H. Letters sent to customers as part of an organized solicitation of business.

It appears to me your letter is an organized solicitation offering your customer a special refinancing offering to retain their business.

We don't do a lot of advertising but what we do is primarily generic where we don't use triggering terms, so I am far from an expert on advertising but I don't see how this solicitation would not be an advertisement.

Thank you for your input. In the back of my mind I thought that contacting a customer regarding their account and offering other terms was not considered "advertising" under the rule. I think of the advetrising rules as applying to a larger group or market and not corespondence to one particular customer. Maybe that's just what I wanted to believe!