marketing & advertising compliance seminar created by Valerie Edgington & presented to credit unions

1. Marketing & Advertising
& A
& g
Compliance:
Truth is NOT Relative
Relative!
Valerie Edgington, CUCE, BSACS
September 2009

2. Insane in the membrane…
Insane in the membrane…
Advertising:
The science of
arresting the
human
intelligence long
enough to get
ht t
money from it.”
Stephen Leacock

3. What is Advertising?
What is Advertising?
NCUA – Truth‐in‐Savings Part 707.8(a) and 707.11
“A commercial message, appearing in any medium, that promotes directly
g , pp g y , p y
or indirectly the availability or terms of, or a deposit in, a new account, and
for purposes of Sections 707.8(a) and 707.11, the terms of, or a deposit in, a
new or existing account.”

4. Forms of Advertising
Forms of Advertising
• Television, radio, newspapers, billboards, websites
• Internet home banking advertising
I t th b ki d ti i
• Newsletters, brochures, pamphlets, and fliers
• Outdoor displays ‐ posters, banners, and window signs
• Lobby boards
• Statement stuffers and statement messages
• Telephone response machines
Telephone response machines
• Rate sheets*
• Direct mail
• Oral quotes
O l t
• Point‐of‐sale materials

5. Which products are affected?
Which products are affected?
• Savings products
o Share accounts
o Share draft accounts
o Term share accounts
• Loan products
o Open‐end
o Closed‐end
o Home Equity Line of Credit
• Al
Almost everything!!
t thi !!

6. Advertising Commandments
Advertising Commandments
• Advertisements shall be accurate.
• Advertisements shall not be
Advertisements shall not be
misleading.
• Advertisements shall not be
Advertisements shall not be
deceptive.
• Advertisements shall not misrepresent
the credit union’s products or services.
• Advertisements shall not discriminate.

7. NCUA Rules & Regulations
Part 740
• Rules apply to all federally insured credit unions (740.0).
Rules apply to all federally insured credit unions (740 0)
• Requirements for the official sign insured credit unions must display
(740.4).
• Requirements with regard to the official advertising statement insured
credit unions must include in their advertisements (740.5).
• Specific requirements regarding advertising of excess share insurance
Specific requirements regarding advertising of excess share insurance
(740.3).
• Requires that all other kinds of advertisements be accurate (740.2)

8. Accuracy of Advertising
Part 740.2
• No insured credit union may use any advertising or make any
representation which is inaccurate or deceptive in any particular, or which
representation which is inaccurate or deceptive in any particular or which
in any way misrepresents its services, contracts, investments or financial
condition.
• Includes print, electronic, or broadcast media, displays and signs,
stationery, and other promotional material.
• Permits use of trade name in advertising or signage as long at CU uses its
Permits use of trade name in advertising or signage as long at CU uses its
official charter name in communications with NCUA and for share
certificates or certificates of deposit, signature cards, loan agreements,
account statements, checks, drafts and other legal documents.
account statements checks drafts and other legal documents

9. Official Sign
Part 740.4
• Each insured credit union must continuously display the official sign at each
station or window where insured account funds or deposits are normally
received.
• Each insured credit union must also display the official sign on its Internet
page, if any, where it accepts deposits or open accounts.
• A credit union may alter the font size of the official sign to make it legible on
its internet page and on documents it provides to its members including
its internet page and on documents it provides to its members including
advertisements, but it may not do so on signs to be placed at each station or
window where the credit union normally receives insured funds or deposits in
its principal place of business and all of its branches.

10. Official Advertising Statement
Part 740.5
• Each insured credit union must include the official advertising statement
in all of its advertisements.
• The official advertising statement is as follows:
o This credit union is federally insured by the National Credit Union
Administration.
• The short title ‘‘Federally insured by NCUA’’ and a reproduction of the
h h i l ‘‘ d ll i d b C ’’ d d i f h
official sign may be used by insured credit unions at their option.
• The official advertising statement must be in a size and print that is clearly
Th ffi i l d ii b i i d i h i l l
legible.

11. Exceptions from use of
Official Advertising Statement:
ff l d
• Statements of condition and reports of condition of an insured credit
union which are required to be published by state or federal law or
regulation;
• Credit union supplies such as stationery (except when used for circular
letters), envelopes, deposit slips, checks, drafts, signature cards, account
passbooks, and non‐insurable certificates;
• Signs or plates in the credit union office or attached to the building or
buildings in which the offices are located;
buildings in which the offices are located;
• Listings in directories;

12. Exceptions from use of
Official Advertising Statement:
ff l d
• Advertisements not setting forth the name of the insured credit union;
Advertisements not setting forth the name of the insured credit union;
• Display advertisements in credit union directories, provided the name of
the credit union is listed on any page in the directory with a symbol or
the credit union is listed on any page in the directory with a symbol or
other descriptive matter indicating it is insured;
• Joint or group advertisements of credit union services where the names of
insured credit unions and noninsured credit unions are listed and form a
part of such advertisement;
• Advertisements by radio that do not exceed thirty (30) seconds in time;
Advertisements by radio that do not exceed thirty (30) seconds in time;
• Advertisements by television, other than display advertisements, that do
y( ) ;
not exceed thirty (30) seconds in time;

13. Exceptions from use of
Official Advertising Statement:
ff l d
• Advertisements that because of their type or character would be
Advertisements that because of their type or character would be
impractical to include the official advertising statement, including but not
limited to, promotional items such as calendars, matchbooks, pens,
pencils, and key chains;
pencils, and key chains;
• Advertisements that contain a statement to the effect that the credit
union is insured by the National Credit Union Administration, or that its
accounts and shares or members are insured by the Administration to the
maximum of $100,000 for each member or shareholder;
• Advertisements that do not relate to member accounts, including but not
limited to advertisements relating to loans by the credit union,
safekeeping box business or services, traveler’s checks on which the credit
union is not primarily liable, and credit life or disability insurance
i i t i il li bl d dit lif di bilit i

14. Fair Housing Act and
NCUA 701.31

15. Fair Housing Act
Fair Housing Act
• Makes it unlawful to make, print or publish any notice, statement, or
advertisement with respect to the financing of a dwelling that indicates
advertisement with respect to the financing of a dwelling that indicates
any preference, limitation, or discrimination based on race, color,
religion, sex, or national origin.
• NCUA issued this regulation to make the Fair Housing Act applicable to
NCUA issued this regulation to make the Fair Housing Act applicable to
credit unions.
• Regulation prohibits advertising in connection with real estate loans
that imply or suggest that the credit union discriminates in violation of
that imply or suggest that the credit union discriminates in violation of
the Fair Housing Act or Equal Credit Opportunity Act.

16. Fair Housing Act
Fair Housing Act ‐ Advertising
• Depending on the type of ad, credit unions must include certain Equal
Housing non‐discrimination notices.
Housing non discrimination notices
• The type of notice and language in the notice depends on the type of
advertising media.
o P i t Ad A
Print Ads – Any ad in print that advertises for a real estate loan
di i t th t d ti f l t t l
must not include any discriminatory provision and must include the
Equal Housing logo
o B d t M di Ad f
Broadcast Media – Ads for real estate on the radio must contain the
l t t th di t t i th
statement that “the (name) Credit Union is an equal housing
lender”
o C dit U i L bb Di l
Credit Union Lobby Displays – C dit i
Credit unions must conspicuously
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display in its lobby a notice that contains the Equal Housing logo.

17. Truth‐in‐Savings
Truth in Savings

18. Truth‐in‐Savings
NCUA Part 707
• All
All natural person credit unions, even those that are privately insured or
l di i h h i l i d
uninsured, are required to comply with the TIS regulation.
• Allows consumers to compare deposit accounts at different financial
o s co su e s o co pa e depos accou s a d ffe e f a c a
institutions.
• Rules also applicable to any person who advertises an account offered
by a credit union, including any person who solicits any amount from
by a credit union including any person who solicits any amount from
any other person for placement in a credit union.
• Exemptions:
• Corporate credit unions
• Credit unions with assets less than $2 million

19. Misleading or inaccurate
advertisements
• Advertising disclosures must be provided in a clear and conspicuous
manner.
manner
• Use of the term “profit” prohibited in deposit account advertisements.
• Term “profit” may be used when advertising dividend‐bearing
accounts.
t
• It’s not “free” if there’s a “fee.”
o May not advertise as free or no‐cost if any maintenance or activity fee may
be imposed, including:
b i d i l di
o Fees charged when minimum balance requirement not met;
o Member exceeds a specified number of transactions;
o Service charges, fees to deposit, withdraw or transfer funds.
Service charges fees to deposit withdraw or transfer funds
o Stop‐payment fees, returned share‐draft fees, or fees unrelated to an account
are exempted.
• Specific services may be advertised as free if they are:
• Free transactions at ATM machines.

20. Permissible Rates
Permissible Rates
• Not required to include rates in advertisements.
• If any rate stated then must use the term “annual percentage yield”
If t t t d th t th t “ l t i ld”
• May use APY if the term is stated in full at least once in the ad.
• No other rate except nominal dividend may be stated:
• “Annual Percentage Rate” or “APR” may not be used in ads for accounts
covered by Truth‐in‐Savings.
• If APY is used for tiered‐rate account, it must include all of the APYs for
each tier, including:
• Range of APYs, if applicable
• Minimum balance required to obtain APY for each tier.
• If dividend rates are stated, each rate must appear with the corresponding
APY.

21. Additional Disclosures when stating
dividend rate or APY
di id d
• If a credit union includes a dividend rate in ad, it must also include the
corresponding APY.
• If APY provided in ad, additional disclosures must be included:
o Variable rate account information
o Minimum balance information
o Effect of fees; and
o Certificate account information
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• If APY stated in ad for tiered‐rate accounts, ad must include all of the APYs
or ranges of APYs that apply and the corresponding minimum balance
requirements to earn APYs.
• Statement such as “we pay the rate available for 90‐day U.S. Treasury bills
plus one percent” equivalent to providing rate and additional disclosures
must be included.

22. Variable Rate Accounts
Variable Rate Accounts
• Credit unions that include an APY for a variable rate account must:
o State that rate may change after the account opened;
o Period of time which the APY will be offered;
f ff ;
• For Interest‐bearing accounts and dividend‐bearing accounts, may state
either the period of time the APY will be offered or that the APY is accurate
as of a specific date.
• For other dividend‐bearing accounts, the credit union must provide the
APY as of the last dividend declaration date and a statement to that
effect; or
• A
A current APY and a statement as to how long the APY will be effect.
t APY d t t t t h l th APY ill b ff t

23. Certificate Accounts
• If APY is provided for certificate account, the advertisement must:
o State time requirement necessary to earn advertised APY.
o St t
State any lower APY will be earned if member withdraws funds prior to
l APY ill b d if b ithd f d i t
fulfilling time requirement.
o Statement that a dividend penalty may or will be imposed for early
withdrawal.
withdrawal
• Certificates greater than one year that do not compound dividends on
annual or more frequent basis, that require dividend payouts at least
annually, and that disclose an APY must provide statement that dividends
annually, and that disclose an APY must provide statement that dividends
cannot remain on account and that a payout of dividends is necessary for
non‐compounding term share accounts.

24. Certificate Accounts
• The term “certificate of deposit” or “CD” may NOT be used to
The term certificate of deposit or CD may NOT be used to
describe share certificates and other dividend‐bearing term
share accounts.
• Interest‐earning term share accounts are “certificates of
deposit” or “CDs”
• Dividend‐bearing term share accounts are “Share
Certificates, Certificate Accounts, or Certificates, NOT
Certificates ” “Certificate Accounts ” or “Certificates ” NOT
“CDs.”

25. Bonuses
• Ad that include “bonuses” must include additional information:
o The annual percentage yield, using that term;
The “annual percentage yield ” using that term;
o Time requirements to earn the bonus;
o Minimum balance required to obtain bonus;
o Minimum balance required to open account if greater than minimum balance
Minimum balance required to open account if greater than minimum balance
to obtain the bonus; and
o When the bonus will be provided.
• If the minimum balance requirements for the bonus are the same
If the minimum balance requirements for the bonus are the same
as the minimum balance required to earn the APY, the minimum
balance disclosures may be combined.
• If no dividends are to be paid on the account, no rate information
f di id d b id h i f i
need be stated.

26. Overdraft Protection Programs
• Credit unions that promote the payment of overdrafts in an
p p y f f
advertisement must include in a clear and conspicuous
manner the following:
o The fee or amount of each overdraft;
o The transactions for which a overdraft fee may be imposed;
o The time period by which the member must repay or cover any overdraft;
o The circumstances under which the credit union will not pay an overdraft.
Note: There are also requirements for disclosures on the periodic statement if
a credit union promotes the payment of overdrafts in an advertisement.
di i h f d f i d i

27. Overdraft Protection Programs
• Advertisements made on an ATM screen or on a telephone
response machine are not required to disclose:
response machine are not required to disclose:
o The categories of transactions for which an overdraft may be imposed; and
o The circumstances under which the credit union will not pay an overdraft.
• Advertisements on indoor signs for the credit union’s ODP
program do not require the above disclosures provided the
sign contains a clear and conspicuous statement that fees may
apply and that members should contact an employee for
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further information about fees and terms.
f f

28. Overdraft Protection Programs:
Advertising disclosure exceptions
Advertising disclosure exceptions
• An advertisement promoting the credit union’s ODP program where the
payment of overdrafts is agreed to in writing and is subject to Truth in
t f d ft i dt i iti di bj t t T th i
Lending and Regulation Z.
• A communication by a credit union about the payment of overdrafts in
response to a member inquiry.
• An advertisement made through broadcast media such as television or
radio.
• An advertisement made on outdoor media such as billboards.
• An ATM receipt.
• An in‐person discussion with a member.
• Disclosures required by Federal or other law.

29. Overdraft Protection Programs:
Advertising disclosure exceptions
Advertising disclosure exceptions
• Information included on a periodic statement or a notice informing a
f p f g
member about a specific overdraft or the amount the account is
overdrawn.
• A term share account agreement discussing the credit union’s right to pay
At h t t di i th dit i ’ i ht t
overdrafts.
• A notice provided to a member that completing a transaction may trigger
p p g y gg
a fee for overdrawing an account, such as at an ATM.
• Informational or educational materials concerning the payment of
overdrafts if the materials do not specifically describe the credit union’s
d ft if th t i l d t ifi ll d ib th dit i ’
overdraft program.

30. Overdraft Protection Programs
Truth‐In‐Savings Update:
h i d
• Effective January 1, 2010
• Disclosure of costs of overdraft services on periodic statements
o Month and Year‐to‐date
o Required of ALL financial institutions, even if do not advertise ODP
• Advertising disclosures for overdraft services
o Add an institution’s opt‐in or opt‐out notice that it provides with regard to the
payment of overdrafts as an additional example.
p y f f p
• Balance inquires
o Provide account balance information through automated system that discloses
only the amount of funds available for withdrawal, without including the
only the amount of funds available for withdrawal, without including the
additional funds that would be available under ODP program.
o Applies to ODP, lines of credit, or transfers from other accounts
o Includes internet website and telephone response systems.
p p y

31. Newsletters
• Newsletters sent to existing members only and not intended for potential
members are exempt from most advertising requirements. Newsletters
posted on websites require full disclosures.
d bi i f ll di l
• If a newsletter states a rate of return for an account covered by TIS, the
rate must be stated as an “annual percentage yield” or “APY.”
• The corresponding dividend rate may be included, but no other rates.
• A statement must be included advising members to contact the credit
union for additional information about fees and rates.
• Language must not be misleading or inaccurate, or misrepresent the
contract terms.
• The word “profit” may not be used for interest bearing accounts.
• May not be advertised as “free” if there’s a fee.

32. Lobby Boards and Indoor Signs
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• Lobby boards advertising requirements are the same as for newsletters.
• Exemption applies to lobby board signs inside the premises of the credit
union, including signs facing outside which are intended to be viewed from
outside.
• Advertisements on inside banners, preprinted posters, chalk boards, and
computer screen are subject to the same exemption.
• If an individual is able to receive a computer printout, such a form is
If an individual is able to receive a computer printout such a form is
subject to the general advertising rules (i.e. a receipt which advertises a
product or service).
• Advertisements that may be retained by member are NOT indoor signs
Ad ti t th t b t i db b NOT i d i
and require full disclosures.

33. Broadcast, Electronic Media,
and Outdoor Signs
and O tdoor Signs
• Advertisement through television, radio, other electronic media,
telephone response machines, or on outdoor media such as billboards:
telephone response machines or on outdoor media s ch as billboards
o Ads must be accurate and not misrepresent the contract terms.
o Ads may not be advertised as "free" if any maintenance or activity fee may be charged;
o The word "profit" may not be used for interest‐bearing accounts.
o If a rate is stated, it must be stated as an "annual percentage yield,“ and no other rate
except the corresponding dividend rate may be provided.
o If the APY is stated the minimum balance to earn the APY or for tiered rate accounts
If the APY is stated, the minimum balance to earn the APY or for tiered‐rate accounts,
the range of APYs must be stated.
o If the APY is stated for a certificate account, the term of the account must also be
stated.
o If a bonus is stated, the "annual percentage yield,“ the time requirements and the
minimum balance required to earn the bonus must be included.

34. Truth in Lending Act
Truth‐in‐Lending Act

35. TILA
Definition of Advertising
12 CFR 226.1
Any commercial message promoting,
directly or indirectly, a credit transaction

36. Advertisements under TILA
Advertisements under TILA
• Advertisements may appear in:
o Newspapers, magazines, leaflets, flyers, catalogs, direct mail
literature, other printed material
o Radio, television, or a public address system
o Inside or outside sign or display
o POS literature, price tags, signs, billboards
o Online
o Telephone solicitations
o Messages on share draft account statements offering auto loans at a
stated annual percentage rate
stated annual percentage rate
o Communications promoting new open‐end plan or closed‐end
transaction

37. The TILA Advertising Formula:
The TILA Advertising Formula:
If an open‐end or closed‐end advertisement includes
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“trigger terms,” it must also include additional
disclosures or certain other information.
Trigger Additional
Term Disclosures

38. Open End Trigger Terms
Open‐End “Trigger” Terms
If the advertisement for an Open‐End loan contains any of the
f h d i f dl i f h
following trigger terms, additional disclosures are required:
• The finance charge, including:
o Periodic rate used to compute the finance charge or APR;
o Statement of when the finance charge begins to accrue, including a “grace
period” or “free ride” period;
o Method of determining the balance on which a finance charge may be
imposed;
o Method of determining the finance charge, including description of how any
finance charge other than periodic rate will be determined;
finance charge other than periodic rate will be determined;
• Any other charges aside from the finance charge that may be imposed as part of
the plan.

39. Open End Disclosures
Open‐End Disclosures
If the advertisement for an Open‐End loan contains any of the
f f p y f
trigger terms previously mentioned, it must also disclose:
• Any minimum, fixed, transaction, activity, or similar charges that could be
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imposed; ;
• Any periodic rate that may be applied, expressed as an APR;
• If the plan provides for a variable periodic rate, that fact must also be
disclosed;
• Any membership or participation fee that could be imposed.
Note: The periodic rate and APR are triggering terms and require the above
disclosures.

40. Open‐End Lending:
Advertising Credit Cards
• The APR for purchase transactions must be in at least 18‐point type and
must appear under a separate heading in the Schumer box or table from
other APRs, such as the penalty APR, balance transfer APR, and the cash
advance APR;
• The disclosures must be “readily noticeable” and in a “reasonably
understandable form.” Disclosures in at least 12‐point type will be
considered readily noticeable.
considered readily noticeable.
• The disclosures in the Schumer box or table must be “prominently
located.”
o Disclosures are on the same page as the application or solicitation reply form; or
o Disclosures can appear elsewhere if the application or solicitation reply form contains a
clear and conspicuous reference to the location of the disclosures.

41. Open‐End Lending:
Advertising Credit Cards
• To simplify the table, only the penalty rates or APR that will apply on the
occurrence of one or more specific events—such as a late payment or an
extension of credit exceeding the credit limit—can appear INSIDE the
table;
bl
• Explanatory information—such as when the penalty applies and how it is
calculated—must appear OUTSIDE the table.
• The APR for cash advances and balance transfers must be disclosed in the
table.
• Balance transfer fees can be disclosed either within or outside the table,
as is currently the case for cash advance fees, late payment fees, and
over‐the‐limit fees.

42. Open‐End Lending:
HELOC Ads Trigger Terms
HELOC Ads Trigger Terms
Additional disclosures are required if an advertisement for an open‐
end HELOC sets forth – either affirmatively or negatively – any of the
following terms:
• The finance charge, including:
f g , g
o Periodic rate;
o Statement of when the finance charge begins to accrue, including the “free ride” or
“grace period, if any;
o Method of determining the balance on which a finance charge may be imposed;
o Method of determining the finance charge, other than the periodic rate, will be
determined;
o Any other charges that may be imposed as part of the plan
h h h b d f h l
o The trigger terms include statements such as “no annual fee,” “no points,”
or “we waive closing costs.”

43. Open‐End Lending:
HELOC Ads
HELOC Ads
Additional disclosures are required if an advertisement for an open‐
end HELOC contained any of the trigger terms previously mentioned:
• Any loan fee that is a percentage of the credit limit under the plan and an
estimate of any other fees for opening the plan, stated as a single dollar
estimate of any other fees for opening the plan stated as a single dollar
amount or a reasonable charge;
• Any periodic rate used to compute the finance charge, expressed as an
annual percentage rate;
l
• The maximum annual percentage rate that may be imposed in a variable‐
rate plan.
• Including a phrase such as “low fees” would NOT trigger additional
disclosures.

44. Open‐End Lending:
HELOC Teaser Rates
HELOC Teaser Rates
• A teaser rate is an introductory rate, not based on the index and margin,
that will be used later to make rate adjustments in a variable‐rate plan.
• If an ad for a HELOC states a teaser rate, the advertisement must include:
If an ad for a HELOC states a teaser rate, the advertisement must include:
o The period of time the teaser rate will be in effect; and
o With equal prominence to the initial or teaser rate, a reasonably current
annual percentage rate that would have been in effect had the teaser rate not
been offered.

45. Open‐End Lending:
HELOC Ads ‐ Balloon Payments
• If a HELOC ad includes a statement about any minimum periodic payment, the ad
must clearly and conspicuously state that a balloon payment may result, if
applicable; and
• The amount and timing of the balloon payment that will result if the consumer
makes only the minimum payments for the maximum period of time that the
consumer is permitted to make such payments.

46. Open‐End Lending:
HELOC Ads – Tax Deductions & Free Money
HELOC Ads – Tax Deductions & Free Money
• If a HELOC ad states that any interest expense incurred under the plan is or
may be tax deductible, it may be misleading on that point.
• The Official Staff commentary states that an advertisement referring to tax
deductibility is not misleading if it includes a statement such as consult a
deductibility is not misleading if it includes a statement such as “consult a
tax advisor regarding the deductibility of interest.”
• Compliance tip: If your HELOC ad includes any mention about tax
deductibility, use the above phrase, or words to that effect, to avoid claims
deductibility use the above phrase or words to that effect to avoid claims
that your ad was in any way misleading on that point.
• A HELOC ad may not refer to the home equity plan as “free money” or
contain a similarly misleading term.
contain a similarly misleading term

47. Open‐End Lending:
HOEPA and Reg Z Advertising Rules
HOEPA and Reg Z Advertising Rules
• Clear and conspicuous standard
l d d d
• Disclosures must not be obscured
• Additional disclosures must be given when an ad states that
extensions of credit greater than the Fair Market Value of
the home are available
the home are available

48. Advertising
Advertising
Closed‐End Credit

49. Closed End Trigger Terms
Closed‐End “Trigger” Terms
If the advertisement for a closed‐end loan contains any of the
following trigger terms, additional disclosures are required:
f ll i i ddi i l di l i d
• The amount or percentage of any down payment
o this includes stating “Only 5% down” or “As low as $100 down” or “80 percent
financing available”
• The number of payments or the period of repayment
o This includes stating “48‐month payment terms” or “30‐year mortgage”
• The amount of any payment; and
• The amount of any finance charge
• • Stating “No down payment” does NOT trigger additional disclosures.

50. Closed‐End Disclosures
If the advertisement for a Closed‐End loan contains any of the
Trigger terms previously mentioned, it must also disclose:
• The amount or percentage of the down payment;
• The terms of repayment
o Example: “$20 000 new car loan for a term of 60 months with a 6 75% APR
Example: $20,000 new car loan for a term of 60 months with a 6.75% APR,
the monthly payment will be $______.”
• The “annual percentage rate,” using that term, and shall not sate any
other rate, except that a simple annual rate that is applied to an unpaid
other rate except that a simple annual rate that is applied to an unpaid
balance may be stated in conjunction with, but not more conspicuously
than the APR.
• If the rate may be increased after consummation, that fact must also be
f f f
stated.

51. Advertising Rules for Home‐Secured
Closed‐End Credit
If an advertisement for credit secured by a dwelling states a simple
annual rate of interest and more than one simple annual rate of
annual rate of interest and more than one simple annual rate of
interest will apply over the term of the advertised loan, the
advertisement shall disclose in a clear and conspicuous manner:
• Each simple annual rate of interest that will apply.
• For variable‐rate transactions, a rate determined by adding an index and margin
y g
shall be disclosed based on a reasonably current index and margin.
• The period of time during which each simple annual rate of interest will apply; and
• The annual percentage rate for the loan. If the rate is variable, the APR shall
comply with the accuracy standards in 226.17(c) and 226.22.

52. Advertising Rules for Home‐Secured
Closed‐End Credit
If an advertisement for credit secured by a dwelling states the
amount of any payment, the advertisement shall disclose in a clear
amount of any payment the advertisement shall disclose in a clear
and conspicuous manner:
• The amount of each payment that will apply over the term of the loan, including
any balloon payment.
• For variable‐rate transactions, payments that will be determined based on the sum
of an index and margin and shall be disclosed based on a reasonably current index
and margin.
• The period of time during which each payment will apply; and
• In an advertisement for credit secured by a first lien on a dwelling, the fact that the
I d ti tf dit d b fi t li d lli th f t th t th
payments do not include amounts for taxes and insurance premiums, if applicable,
and that the actual payment obligation will be greater.
Note: Additional disclosures must be given when an ad states that
extensions of credit greater than the fair market value are available.

53. Advertising Rules for Home‐Secured
Closed‐End Credit
Prohibition of certain acts or practices:
• Advertising fixed‐rate or payments when rate or payments are fixed only
for limited period of time, rather than full loan term
• Making comparisons between actual and hypothetical rates and payments
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• Falsely advertising a loan as government supported or endorsed
• Displaying the name of the consumer’s current lender without disclosing
that the ad is not affiliated with the current lender
• Claiming debt elimination when one debt merely replaces another
• Using the term “counselor” by for‐profit brokers or lenders
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• Advertising certain information in a foreign language but providing
required disclosures only in English

54. Advertising Rules for
ALL Home‐Secured Credit
If a promotional rate or payment is advertised, the advertisement must
state, in addition to the other required disclosures, the following
state in addition to the other required disclosures the following
information:
• The period of time the rate or payment will apply;
• Any APR that will apply under the plan (when promotional rate is advertised); and
Any APR that will apply under the plan (when promotional rate is advertised); and
• The amount and time periods of any payments that will apply under the plan
(when promotional payment is advertised).
Disclosures of rate and payments when advertising promotional or teaser
Disclosures of rate and payments when advertising promotional or “teaser”
rates
• Avoid undue emphasis on promotional or “teaser” rates
• If ad states simple annual rate of interest and more than one simple annual rate of
If ad states simple annual rate of interest and more than one simple annual rate of
interest will apply over term, then additional disclosures required

55. Consumer Leasing Advertising
Consumer Leasing Advertising
Rules
Regulation M
Regulation M

56. Consumer Leasing
Consumer Leasing
• Clear and conspicuous
• Accurate disclosure of lease terms in advertising – don’t say it if it ain’t
so!
• All required advertising disclosures must be provided to consumer upon
All required advertising disclosures must be provided to consumer upon
request.
• If advertisement contains a lease rate, the ad must also including the
following statement near the rate without any intervening language or
following statement near the rate without any intervening language or
symbols:
Disclosure on Demand
This percentage may not measure the overall cost of financing the lease.

57. Consumer Leasing Trigger Terms
Consumer Leasing Trigger Terms
Certain disclosures in leasing advertisements trigger additional
Certain disclosures in leasing advertisements trigger additional
disclosures. Reg M trigger terms include the following:
• the amount of any payment;
the amount of any payment;
• a statement of any capitalized cost reduction or other
payment (or that no payment is required) prior to, or at,
payment (or that no payment is required) prior to, or at,
consummation or by delivery—if delivery occurs after
consummation.

58. Consumer Leasing Disclosures
If your credit union advertises a leasing product that includes either
of the trigger terms, generally that ad also must include the
of the trigger terms generally that ad also must include the
following:
• A statement that the transaction advertised is a lease;
• The total amount due prior to, or at, consummation (lease signing) or by
delivery—if delivery occurs after consummation;
• The number, amounts, and due dates or periods of scheduled payments under
the lease;
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• A statement of whether a security deposit is required;
• A statement that an extra charge may be imposed at the end of the lease term
where the lessee’s liability (if any) is based on the difference between the
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residual value of the leased property and its realized value at the end of the
lease term.

59. Consumer Leasing
Advertising Exceptions
Advertising Exceptions
If an advertisement is made through television or radio and includes either
of the triggering terms listed, the additional disclosure requirements are met
of the triggering terms listed, the additional disclosure requirements are met
if the ad:
• States that the transaction advertised is a lease;
• Includes the total amount due at lease signing or delivery, if delivery occurs after
lease signing; and either:
• Lists a toll‐free, local, or collect telephone number along with a reference that the
number can be used to learn about the rest of the terms of the lease (the number
must be in operation no later than the ad s air date and must continue for at least
must be in operation no later than the ad’s air date and must continue for at least
10 days after that air date); or:
• directs the consumer to a written advertisement in a local newspaper (as the
regulation puts it, a “publication of general circulation in the community served by
the media station”)—including the name and the date of the publication, along
with a statement that the rest of the terms of the lease are included in the
advertisement. This written advertisement must be published beginning at least 3
days before and ending at least 10 days after, the broadcast.
d b f d di t l t 10 d ft th b d t

60. Consumer Leasing
Advertising Exceptions
Advertising Exceptions
If a merchandise tag includes either of the triggering terms listed earlier, that
tag does not need to include the additional disclosures triggered—provided
the tag refers to a sign or display prominently posted in the lessor s place of
the tag refers to a “sign or display prominently posted in the lessor’s place of
business that contains a table or schedule of the required disclosures” (so, an
exception to the exception).
This exception was designed more for lessors that operate out of dealer
showrooms. But it might apply if, for example, a credit union held an on‐
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premises auto sale that included lease financing.
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61. Bonus & Word of Mouth
Advertising

62. Word of Mouth Advertising
(Refer‐A‐Friend)
( f i d)
• If the credit union offers members some form of compensation for
If the credit union offers members some form of compensation for
referrals, it should disclose this fact to the individual being referred
to the credit union.
• The disclosure should be made prior to the individual opening the
The disclosure should be made prior to the individual opening the
account.
• Can either be in verbal or written form.
• If the disclosure is provided verbally, the credit union’s policies and
procedures should document how and when the disclosures are
being provided to prospective members.
being provided to prospective members

63. Word of Mouth Advertising Disclosures
(Refer‐A‐Friend)
( f i d)
• Verbal disclosure at the time of the account opening:
Verbal disclosure at the time of the account opening:
o The employee opening the account may ask the individual if she was referred
by a credit union member. If the answer is “yes,” then the employee can
simply disclose, “The member who referred you will receive $10 in her share
account for referring you to our credit union.”
• Written disclosure on application:
o H
Have the member check off a box on the application that says, “If you were
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referred by one of our members, check here and fill in the name of the person
who referred you. The member who referred you will receive $10 for
recommending that you join our credit union.”
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64. Bonus Advertising
• If a prize is worth more than $10 and is tied to a share account, then a
credit union must disclose the prize as a bonus under the Truth in Savings
Act.
• A bonus is defined as a premium, gift, award, or other consideration worth
more than $10 (whether in the form of cash, credit, merchandise, or any
equivalent) given or offered to a member during a year in exchange for
opening, maintaining, or renewing an account, or increasing an account
balance.
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• The term “bonus” does not include dividends, other consideration worth
$10 or less given during a year, the waiver or reduction of a fee, the
absorption of expenses, non‐dividend membership benefits, or
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extraordinary dividends.

65. Bonus Advertising Disclosures
• A bonus disclosure must state, to the extent applicable:
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o The amount or type of any bonus;
o When the bonus will be provided;
o Any minimum balance and time requirements to obtain the
bonus;
o Any minimum balance to open the account; and
Any minimum balance to open the account; and
o The APY.
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Don’t forget about IRS reporting requirements!
b IRS i i !

66. This, that and the other…
This, that and the other…
• Deposit tickets must comply!
o If credit union uses deposit receipts to advertise, then the various requirements
of TIS or TIL advertising regulations apply.
o NCUA lists as exception but antidiscrimination rules apply (701.31)
o Sh ld l i l d E
Should also include Equal Housing Lender logo
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o Reg CC requires that a credit union include a notice on all of its preprinted
deposit slips furnished to members stating that deposits may not be available
for immediate withdrawal.
for immediate withdrawal.
• Brochures
o Generic brochures don’t generally specify rates and terms, however, Section
701.31 always will apply to general brochures.
701 31 always will apply to general brochures

67. This, that and the other…
Equal Credit Opportunity Act
l di i
• Cannot discourage someone from a protected class (age, sex, race, color,
Cannot discourage someone from a protected class (age sex race color
religion, national origin, marital status, etc.) from applying for a loan.
• Marital Status ‐ may only ask about an applicant’s spouse when:
o The spouse will be a user of the account or joint obligor;
o The applicant is relying on the spouse’s income for repayment;
o The applicant is in a community‐property state; or
o The applicant is relying on alimony, child support, or maintenance for repayment.
o When asking about an applicant’s spouse under the circumstances permitted
above, the credit union must use the terms, “married,” “unmarried” or “separated.”
o Elderly programs – must be 62 or older for special credit terms

68. This, that and the other…
CAN‐SPAM Act 2003
• Advertising by E‐Mail
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• Purpose is to hinder persons who send commercial e‐mail
messages (i.e. those having the primary purpose of
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advertising or promoting a product or service)
• Transactional or relationship emails not subject to Act
• Effective July 7, 2008

69. This, that and the other…
CAN‐SPAM Act
For e‐mails that are subject to the CAN‐SPAM Act, each email must:
il h bj h C S h il
• Use accurate and non‐misleading header information.
• Use accurate and non‐misleading subject line information.
• Provide a clear and conspicuous opt‐out option for future commercial e‐
mail messages.
• Provide the sender’s physical postal address in the body of the message.
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• Clearly and conspicuously indicate that your e‐mail message is a
solicitation or advertisement.

70. This, that and the other…
Children’s Online Privacy Protection Act
(COPPA)
If a credit union has a children’s web page within its website, then
the credit union needs to provide:
• Notice on its website of what information the credit union collects from
children,
• How the credit union uses such information, and
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• The credit union’s disclosure practices regarding such information.
• The notice must be placed “in a clear and prominent place and manner on
the home page of the website.
the home page of the website ”

71. This, that and the other…
Non‐Deposit Investment Products
i d
If a credit union advertises non‐deposit investment products, the
advertisements must make complete and accurate disclosures to
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avoid member confusion as to whether a credit union‐related
product is an uninsured investment product or an insured
deposit.
deposit

72. This, that and the other…
Non‐Deposit Investment Products
i d
• When selling, advertising, or otherwise marketing uninsured investment
When selling, advertising, or otherwise marketing uninsured investment
products to members, the following information should be provided in a
clear and conspicuous location and type size on the advertisement:
o The products offered:
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are not federally insured;
are not obligations of the credit union;
are not guaranteed by the credit union or any affiliated entity;
involve investment risks, including the possible loss of principal; and
if applicable, are being offered by an employee who serves both functions of
accepting members’ deposits and the selling of non‐deposit investment
products.
products
• This requirement is applicable to all advertisements of non‐deposit
investment products, including products on websites.

73. Finally…..the End!
Finally…..the End!
Valerie Edgington, CUCE, BSACS
Valerie Edgington CUCE BSACS
September 2009
vme1120@live.com
vme1120@live com
614‐226‐7227