[Code of Federal Regulations] [Title 12, Volume 3] [Revised as of January 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 12CFR226.16] [Page 296-297] TITLE 12--BANKS AND BANKING CHAPTER II--FEDERAL RESERVE SYSTEM PART 226_TRUTH IN LENDING (REGULATION Z)--Table of Contents Subpart B_Open-End Credit Sec. 226.16 Advertising. (a) Actually available terms. If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor. (b) Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under Sec. 226.6 is set forth in an advertisement, the advertisement shall also clearly and conspicuously set forth the following:\36d\ --------------------------------------------------------------------------- \36d\ The disclosures given in accordance with Sec. 226.5a do not constitute advertising terms for purposes of the requirements of this section. --------------------------------------------------------------------------- (1) Any minimum, fixed, transaction, activity or similar charge that could be imposed. (2) Any periodic rate that may be applied expressed as an annual percentage rate as determined under Sec. 226.14(b). If the plan provides for a variable periodic rate, that fact shall be disclosed. (3) Any membership or participation fee that could be imposed. (c) Catalogs or other multiple-page advertisements; electronic advertisements. (1) If a catalog or other multiple-page advertisement, or an advertisement using electronic communication, gives information in a table or schedule in sufficient detail to permit determination of the disclosures required by paragraph (b) of this section, it shall be considered a single advertisement if: (i) The table or schedule is clearly and conspicuously set forth; and (ii) Any statement of terms set forth in Sec. 226.6 appearing anywhere else in the catalog or advertisement clearly refers to the page or location where the table or schedule begins. (2) A catalog or other multiple-page advertisement or an advertisement using electronic communication complies with this paragraph if the table or schedule of terms includes all appropriate disclosures for a representative scale of amounts up to the level of the more commonly sold higher-priced property or services offered. (d) Additional requirements for home equity plans--(1) Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under Sec. 226.6(a) or (b) or the payment terms of the plan are set forth, affirmatively or negatively, in an advertisement for a home equity plan subject to the requirements of Sec. 226.5b, the advertisement also shall clearly and conspicuously set forth the following: (i) Any loan fee that is a percentage of the credit limit under the plan and an estimate of any other fees imposed [[Page 297]] for opening the plan, stated as a single dollar amount or a reasonable range. (ii) Any periodic rate used to compute the finance charge, expressed as an annual percentage rate as determined under section Sec. 226.14(b). (iii) The maximum annual percentage rate that may be imposed in a variable-rate plan. (2) Discounted and premium rates. If an advertisement states an initial annual percentage rate that is not based on the index and margin used to make later rate adjustments in a variable-rate plan, the advertisement also shall state the period of time such rate will be in effect, and, with equal prominence to the initial rate, a reasonably current annual percentage rate that would have been in effect using the index and margin. (3) Balloon payment. If an advertisement contains a statement about any minimum periodic payment, the advertisement also shall state, if applicable, that a balloon payment may result.\36e\ --------------------------------------------------------------------------- \36e\ See footnote 10b. --------------------------------------------------------------------------- (4) Tax implications. An advertisement that states that any interest expense incurred under the home equity plan is or may be tax deductible may not be misleading in this regard. (5) Misleading terms. An advertisement may not refer to a home equity plan as ``free money'' or contain a similarly misleading term. [Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 54 FR 13867, Apr. 6, 1989; 54 FR 24688, June 9, 1989; 54 FR 28665, July 7, 1989; 58 FR 40583, July 29, 1993; 59 FR 40204, Aug. 5, 1994; 59 FR 63715, Dec. 9, 1994; 66 FR 17338, Mar. 30, 2001]