Compliance Question of the Week

Is there a quick reference I can use for advertising compliance?

Lending Ad cheat sheet

  1. Is it open end?
    1. Are all the terms you advertise actually available?
    2. Are rates stated as APR?
    3. Does it have a trigger term?$@
      1. Did you include the trigger disclosures?
    4. Is a minimum periodic payment mentioned?
      1. Did you include the minimum payment disclosures?
    5. Do you refer to an APR as fixed?
      1. Did you state a term?
      2. Did you mean it?
    6. Did you consider fair lending?
    7. Is it a HELOC?
      1. Does it have a HELOC trigger term?$@
        1. Did you include the trigger disclosures?
      2. Did you refer to the money as free or similar?
      3. Did you state that the interest may be tax deductable?
        1. Does the ad state that amount advanced can exceed FMV?
          1. Did you include tax disclosures?
      4. Is there a promotional payment or rate?*
        1. Do you have the time period stated close by?
        2. Do you have the amounts and time periods of the payments under the plan? (payment promotion only)
        3. Do you have information about APRs that will apply under the plan? (rate promotion only)
      5. Did you consider fair housing act?
    8. Is it non-home secured open end credit?
      1. Is there a promotional rate or fee?*
        1. Is it an introductory rate/fee?
          1. Do you state intro or introductory at each mention?
        2. Do you have when the promotion will end?
        3. Do you have what the APR will be when the promotion will end? (rate promotion only)
        4. Do you have the fee that will apply when the promotion will end? (fee promotion only)
      2. Is there a deferred interest mentioned?*
        1. Did you state the period of the deferred interest?
        2. Is ‘no interest’ or similar mentioned?
          1. Did you include ‘if paid in full’ in immediate proximity to each mention?
        3. Did you include a statement about the interest being charged from the date of transaction if it is not paid in full within the period?
        4. Did you include a statement about the interest being charged from the date of transaction if the member goes into default (if applicable)?
  2. Is it closed end?
    1. Does it state only those terms that will be offered?
    2. Are rates stated as APR?
      1. Simple rate may be used, but member has to be able to see both simple and APR
    3. Can the APR increase after consummation?
      1. Must say so
    4. Does it include trigger terms?$@
      1. Do you have trigger disclosures?
    5. Did you think about fair lending?
    6. Is the loan secured by a dwelling?
      1. Is any payment amount stated?#*
        1. Do you include the amount of each payment, including balloon payments?
        2. Do you include the period of time for each payment?
        3. Is the loan secured by a first lien?
          1. Do you include the fact that payments do not include taxes and insurance?
      2. Does the ad state a simple rate, and more than one rate will apply?#*
        1. Do you include each rate that will apply?
        2. Do you include the period of time for each rate?
        3. Do you include the APR?
      3. Does the ad state that the loan may exceed the FMV of the dwelling?
        1. Did you include the tax disclosures?
      4. Did you use the term ‘fixed’ referring to rates?
        1. Is the rate variable?
          1. Did you include the variable language?
          2. Did you include the period where the rate is fixed?
        2. Will the rate increase (such as via a stepped interest mortgage?)
          1. Did you include the period the rate is fixed for?
          2. Did you include a statement that the payment will increase?
      5. Do you compare payments on your loan with those of another loan?
        1. You didn’t compare to payments that are not available for the full term of the loan did you?
      6. Do you state the loan is part of a government program?
        1. Is it really?
      7. Do you use the member’s current lender’s name?
        1. Is your name equally prominent?
        2. Do you state that you are not acting with or on behalf of the other lender?
      8. Do you say the mortgage will eliminate debt?
        1. Bad marketer
      9. Is your entire ad in the same language?
        1. If not, why not?
  3. Did you think about fair housing act?

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

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