§1665b Advertising of open end consumer credit plans secured by consumer’s principal dwelling

Summary

Ads that promote open-end loans secured by your main home (like a home equity line) and that give any specific loan terms must also show extra key facts in a clear and obvious way. They must say any loan fee that is a percent of the credit limit and give an estimate of other account-opening fees as a single number or a range. If periodic rates can be used to figure finance charges, the ad must show those rates as an annual percentage rate (APR). The ad must show the highest APR that could apply and any other details the Consumer Financial Protection Bureau requires. If an ad says interest might be tax deductible, it must not mislead on that point. Paper and internet ads for loans that could go over the home’s fair market value must say that interest on the amount above that value is not tax deductible and tell people to ask a tax adviser. Ads may not call a home equity loan “free money” or use other misleading terms the Bureau bans. If an ad offers a special initial APR that is not based on the index used later, it must also show the current APR that the index would produce and say how long the initial rate lasts. If an ad mentions a minimum monthly payment, it must also say if the plan has a balloon payment. Balloon payment means the borrower must pay the whole remaining balance on a set date and the regular minimum payments would not have paid it off by then.