US Laws, Codes, Statutes & Cases

From the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 15USC1665b]

 
                      TITLE 15--COMMERCE AND TRADE
 
                 CHAPTER 41--CONSUMER CREDIT PROTECTION
 
              SUBCHAPTER I--CONSUMER CREDIT COST DISCLOSURE
 
                       Part C--Credit Advertising
 
Sec. 1665b. Advertising of open end consumer credit plans 
        secured by consumer's principal dwelling
        

(a) In general

    If any advertisement to aid, promote, or assist, directly or 
indirectly, the extension of consumer credit through an open end 
consumer credit plan under which extensions of credit are secured by the 
consumer's principal dwelling states, affirmatively or negatively, any 
of the specific terms of the plan, including any periodic payment amount 
required under such plan, such advertisement shall also clearly and 
conspicuously set forth the following information, in such form and 
manner as the Board may require:

              (1) Loan fees and opening cost estimates

        Any loan fee the amount of which is determined as a percentage 
    of the credit limit applicable to an account under the plan and an 
    estimate of the aggregate amount of other fees for opening the 
    account, based on the creditor's experience with the plan and stated 
    as a single amount or as a reasonable range.

                         (2) Periodic rates

        In any case in which periodic rates may be used to compute the 
    finance charge, the periodic rates expressed as an annual percentage 
    rate.

                 (3) Highest annual percentage rate

        The highest annual percentage rate which may be imposed under 
    the plan.

                        (4) Other information

        Any other information the Board may by regulation require.

(b) Tax deductibility

    If any advertisement described in subsection (a) of this section 
contains a statement that any interest expense incurred with respect to 
the plan is or may be tax deductible, the advertisement shall not be 
misleading with respect to such deductibility.

(c) Certain terms prohibited

    No advertisement described in subsection (a) of this section with 
respect to any home equity account may refer to such loan as ``free 
money'' or use other terms determined by the Board by regulation to be 
misleading.

(d) Discounted initial rate

                           (1) In general

        If any advertisement described in subsection (a) of this section 
    includes an initial annual percentage rate that is not determined by 
    the index or formula used to make later interest rate adjustments, 
    the advertisement shall also state with equal prominence the current 
    annual percentage rate that would have been applied using the index 
    or formula if such initial rate had not been offered.

             (2) Quoted rate must be reasonably current

        The annual percentage rate required to be disclosed under the 
    paragraph (1) rate must be current as of a reasonable time given the 
    media involved.

          (3) Period during which initial rate is in effect

        Any advertisement to which paragraph (1) applies shall also 
    state the period of time during which the initial annual percentage 
    rate referred to in such paragraph will be in effect.

(e) Balloon payment

    If any advertisement described in subsection (a) of this section 
contains a statement regarding the minimum monthly payment under the 
plan, the advertisement shall also disclose, if applicable, the fact 
that the plan includes a balloon payment.

(f) ``Balloon payment'' defined

    For purposes of this section and section 1637a of this title, the 
term ``balloon payment'' means, with respect to any open end consumer 
credit plan under which extensions of credit are secured by the 
consumer's principal dwelling, any repayment option under which--
        (1) the account holder is required to repay the entire amount of 
    any outstanding balance as of a specified date or at the end of a 
    specified period of time, as determined in accordance with the terms 
    of the agreement pursuant to which such credit is extended; and
        (2) the aggregate amount of the minimum periodic payments 
    required would not fully amortize such outstanding balance by such 
    date or at the end of such period.

(Pub. L. 90-321, title I, Sec. 147, as added Pub. L. 100-709, Sec. 2(c), 
Nov. 23, 1988, 102 Stat. 4730.)


                             Effective Date

    For effective date of section, see Regulations; Effective Date note 
below.


                       Regulations; Effective Date

    For provisions relating to promulgation of regulations to implement 
amendment by Pub. L. 100-709 [enacting this section], and effective date 
of such amendment in connection with those regulations, see section 7 of 
Pub. L. 100-709, set out as a note under section 1637a of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 1637a of this title.