Closing cost? or Not a closing cost?

Our home equity line of credit we offer includes a $50 annual maintenance fee. In the past, we didn't collect this until after the first year of the loan. Our consumer lending department wants to collect this when the loan papers are signed but our marketing department wants to continue advertising this product as having no closing costs, then disclose a $50 fee in the fine print (but no mention of when it's collected).

In looking at Kirchman's big orange book, it's mentioned that advertising a loan as having no closing costs is a triggering term. That makes sense. We then must go on and disclose the APR, variable rate disclosure, fees etc.

My question then, is this annual fee just a fee we must disclose (a triggered term) and not a closing cost?

Or is it a closing cost because we will collect it when the note is signed? And then we can't say the loan has no closing costs.

In reply to:

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our marketing department wants to continue advertising this product as having no closing costs, then disclose a $50 fee in the fine print (but no mention of when it's collected).

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You have to disclose when the fee will be collected and if you collect it at closing then IMO it's a closing cost.

226.5b: Requirements for Home Equity Plans (01/01/02)

7) Fees imposed by creditor. An itemization of any fees imposed by the creditor to open, use, or maintain the plan, stated as a dollar amount or percentage, and when such fees are payable .