Trigger Term?

Is "no closing costs" a trigger term for a HELOC ad? We don't have any other trigger terms, so trying to determine if full disclosures are necessary.

Thanks!

1026.16(b) Any term required to be disclosed under §1026.6(a)(1) or (a)(2) set forth affirmatively or negatively in an advertisement for a home-equity plan subject to the requirements of §1026.40 triggers additional disclosures under this section.

So, if we say "No Closing Costs", is it just the APR info which needs to be disclosed?

For example: Rates subject to change. APR is variable and based on The Wall Street Journal Prime Rate (“Prime”). As of 5/1/2020, the best rate is Prime – .50 %. Maximum APR 18%. Minimum APR 4%.

Or would we need more??

What type of loan - open-end, closed end, HELOC, Mortgage?

Sorry, a HELOC...

You have to meet the requirement of 1026.16(b)(1)(i), (ii) and (iii) and (d)(1)(i),(ii), and (iii).

It is hard to say without knowing all the terms and conditions of your HELOCs if that complies with all of the requirements. I can say that you have failed to disclose an APR.

Thanks Randy. Apologies for all of the questions (this is my first 'no closing cost' loan). The HELOC doesn't have any other fees which could be imposed, so (i) and (iii) at 1016.16(b) would not apply. I think it's really just (ii) I have to include then. When you say that the example fails to disclose the APR can you explain? What is the example language missing?

1026.16(d)(ii) Any periodic rate used to compute the finance charge, expressed as an annual percentage rate as determined under §1026.14(b).

Where do you state an actual APR?

{{Lightbulb}} Got it, Randy. Thank you!