Skip to content

List of Triggering Terms for Open-End Credit

Answered by: 

Question: 
Is there a complete list of triggering terms for open-end credit (credit cards namely) somewhere? I have scoured the internet and cannot find a definitive list.
Answer: 

Yes. You'll find it in §1026.16(b). The following is from our training manual on Advertising:

1. “Triggering” Terms [§1026.16(b)]:
If any of the following terms is set forth in an advertisement, the advertisement must include the additional disclosures described in D.2. below:

a. Periodic Rate:
The periodic rate used to compute the finance charge or the annual percentage rate;

b. Finance Charge Accrual Timing:
A statement of when the finance charge begins to accrue, including the “free ride” period (if any);

c. Balance Computation Method:
The method of determining the balance on which a finance charge must be imposed;

d. Finance Charge Calculations:
The method of determining the finance charge, including a description of how any finance charge other than the periodic rate will be determined; and,

e. Other Charges:
The amount of any charge other than a finance charge that may be imposed as part of the plan.

Additional disclosures are required even if the triggering term is not stated explicitly, but may be readily determined from the advertisement; e.g., “small monthly service charge on the remaining balance”, describes how the amount of a finance charge will be determined. The use of positive numbers also triggers further disclosure: e.g. “12 percent Annual Percentage Rate”, or “a $15 annual membership fee buys you $2,000 in credit”.

2. Triggered” Terms [§1026.16(b)]:
An advertisement including any of the previous “triggering” terms must also include each of the following disclosures as applicable:

a. Charges:
Any minimum, fixed, transaction, activity or similar charge that could be imposed;

b. Periodic Rates:
Any periodic rate that may be applied expressed as an “annual percentage rate” using that term or the abbreviation “APR”.

c. Variable Rate Feature:
If the plan provides for a variable rate, that fact must be disclosed.

d. Membership or Participation Fees

There are different triggering terms and triggered disclosures for Open-End Home Equity Plans (HELOC's)

First published on 03/25/2018

Filed under: 
Filed under lending as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics