New Reg Z Rules and Balloon Payment Disclosures

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Question:

We have a home equity product that may have a balloon payment at maturity. Does this have to be disclosed in advertisements for the product?

Answer:

Yes, advertisements will change under the new Reg Z rules effective October 1, 2009. Reg Z was revised to clarify that statements of the amount of any minimum periodic payment trigger the required balloon disclosure. The disclosure of a balloon payment must be equally prominent and in close proximity to the statement of a minimum periodic payment. You will find this under the new Section 226.16(d)(3).

First published on BankersOnline.com 4/06/09