§1665b Advertising of Open End Consumer Credit Plans Secured by Consumer’s Principal Dwelling

Summary

Require ads for open-end home-secured credit (like a home equity line) that give any specific terms or a payment amount to also show key facts in a clear way. The ad must show any loan fee that is a percent of the credit limit and an estimate of other opening fees as one number or a range. If periodic rates may be used to figure finance charges, show those rates as an annual percentage rate (APR). Show the highest APR that could apply. Include any other information the Bureau requires. If the ad says interest might be tax deductible, it must not be misleading. If the credit could exceed the home’s market value and the ad is on paper or the Internet, the ad must say that interest on the amount above market value is not deductible for federal income tax and advise the consumer to talk to a tax adviser. Do not call a home equity account “free money” or use other terms the Bureau finds misleading. If the ad gives an initial APR that is not set by the index or formula used later, it must also show, with the same prominence, the current APR that would apply under the index or formula and say how long the initial rate lasts. If the ad mentions a minimum monthly payment, it must say if the plan has a balloon payment (a repayment option that requires paying the full remaining balance on a set date and where regular payments won’t fully pay off the balance by then).