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Banner Ad Disclosures

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Question: 
We would like to hang Home Equity Line banners with the phrase "Rates as low as" and then show our 6 month Intro APY. Are banners and outdoor ads subject to full disclosure under Reg Z? How much disclosure do I really need to include?
Answer: 

Your references to "APY" and "outdoor ads" indicate that you have a background in deposit compliance. Welcome to Reg. Z!

You inquired about "lines," so you will need to look at Section 226.16. Before you do, however, it would be a fatal error not to read through the definitions of terms, beginning with Section 226.2(a)(2) - "advertisement."

Section 226.16 only covers open end credit. If your promotion also includes equity "loans" (closed-end credit), you'll need to read Section 226.24. These two sets of rules share some similarities, but they are very different. After reading the regs carefully, turn to the Official Staff Commentaries on these sections.

When you are done, you will know that (among other things) the APR is a "trigger term" in open end credit. You will also know what additional disclosures are triggered. Finally, a search of BOL's discussion threads will identify common violations of these rules.

First published on BankersOnline.com 1/23/06

First published on 01/23/2006

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