closed end credit trigger terms

A trigger term is used when advertising what type of credit plan. Youll have a payment due every month until the balance is.

What Is A Triggering Term

For instance a few terms for closed end credit that trigger the need for additional disclosure are.

. 1 The amount or percentage of any downpayment. These provisions apply even if the triggering term is not stated. 1The creditor reasonably contemplates repeated transactions.

These Rules apply to any closed-end consumer credit transaction that is secured by a dwelling 12 CFR. Subpart AProvides general information that applies to both open-end and closed-end credit transactions including definitions explanations. Youll pay less interest overall by taking advantage of a lower interest rate.

Every day except Sundays and Federal holidays. Credit Card Trigger Terms As discussed in the June 2007 proposal the Federal Reserve Board believes that including negative terms as triggering terms for open-end. However the APR is a triggering term for open-end credit.

These are under Section Section 22616 and 22624. 2The creditor may impose a finance charge from time to time on an outstanding unpaid balance. Ing on whether the credit is open-end credit cards and home equity lines for example or closed-end such as car loans and mortgages.

Trigger terms when advertising a closed-end loan include. With closed end credit the loan terms including the loan amount are set and you make payments until youve satisfied the loan. Specifically credit unions may want to review pages 61 64 76 97 and 99 of the Guide as these.

The repayment includes all the interests and financial charges agreed at the signing of the credit agreement. The trigger terms for closed-end loans are. The terms of repayment.

Open-end credit is defined as credit extended under a plan in which. While there has been an avalanche of regulatory changes and some rules such as credit cards targeted to college students and some open-end products have changed the basic trigger terms have not. If any triggering term is used in a closed-end credit advertisement then the following three disclosures must also be included in that advertisement.

2 The number of payments or period of repayment. If youre a responsible borrower closed end credit can boost your credit score and show. 102658 Internet posting of credit card agreements.

102661 Hybrid prepaid-credit cards. 4 The amount of any finance charge. D Advertisement of terms that require additional disclosures 1 Triggering terms.

Closed-end credit usually has a lower interest rate than open-end credit which makes it better for longer-term borrowing. Closed End Credit is defined 2262 as credit other than open-end credit. For further information regarding trigger terms and advertisements member credit unions may want to review NAFCUs Advertising Guide.

Closed-end credits include all. Amount or percentage of any down payment Number of payments or the period of repayment Payment amounts. 36 to 72 month auto loans.

102659 Reevaluation of rate increases. These disclosures are mandated by the TILA which is designed to protect consumers from inaccurate and unfair credit billing and credit card practices. 3 The amount of any payment.

12 percent Annual Percentage Rate or a 15 annual membership fee buys you 2000 in credit. Sometimes mortgage advertisers are not fully aware of the Regulation Z Triggering Terms rules that require additional disclosures to be made in your mortgage ad. 102616a opens new window 12.

Or 4 The amount of any finance charge. For closed-end credit section 102624d requires additional disclosures if an advertisement mentions. Here are are the triggering terms and specific requirements for various advertisement types including deposits closed-end loans open-end loans and non.

An advertisement including any of the previous triggering terms must also include each of the following disclosures as applicable. If the annual percentage rate may be. 102657 Reporting and marketing rules for college student open-end credit.

Under 102624d1 whenever certain triggering terms appear in credit advertisements the additional credit terms enumerated in 102624d2 must also appear. The annual percentage rateusing that term spelled out in full. For instance a few terms for closed end credit that trigger the need for additional disclosure are.

And 3The amount of. Stating No downpayment does not trigger additional disclosures. Closed-end credit is a type of credit that should be repaid in full amount by the end of the term by a specified date.

Those regulations list triggering terms which are words that when used in an ad require you to include specific information on the credit costs and terms you are offering. More specifically the TILA Servicing Rules require. Up to 48 months to pay 90 percent financing As low as 50 a.

The amount or percentage of the down payment. Heres a quick review of the Triggering Terms that come straight from Reg Z 102624. Occasionally you might have closed-end credit with a variable interest rate.

Once the loan is satisfied you dont owe any more and if you want additional credit you have to apply for a new loan. There are triggering terms associated with different loan products such as home equity credit lines closed end credit HELOCs and many other loan products. Tap card to see definition.

Subpart C - Closed-End Credit 102617 102624 Show Hide 102617 General disclosure requirements. The correct answer is. Subpart C - Closed-End Credit 102617 102624 Show Hide 102617 General disclosure requirements.

Triggering terms are words or phrases that must be accompanied by a disclosure when theyre used in advertising. If the institution used triggering terms on any open-end plan advertisement 10266b opens new window did the advertisement also clearly and conspicuously include. 22624 - Closed end credit.

Click card to see definition. The use of positive numbers also triggers further disclosure. 10 20 or 30 year mortgages.

For example when advertising closed-end credit products such as mortgages or. 102660 Credit and charge card applications and solicitations. If credit terms are specific are terms stated that the credit union actually offers or will arrange or offer.

If any of the above trigger terms are present. Regulation Z is structured accordingly. Reg Z has two marketing sections that address trigger term.

What Is A Triggering Term