Is a bank required to include the required deposit disclosure on the TIL if the CD securing the loan is issued by the bank making the loan and the APY is less than 5%?

Sec. 226.18 Content of disclosures.

(r) Required deposit. If the creditor requires the consumer to maintain a deposit as a condition of the specific transaction, a statement that the annual percentage rate does not reflect the effect of the required deposit.

45 A required deposit need not include, for example: (1) An escrow account for items such as taxes, insurance or repairs; (2) a deposit that earns not less than 5 percent per year; or (3) payments under a Morris Plan.

Ray gave you the correct regulatory citation but it should be clarified that the 5% is based on the rate being paid, NOT on the APY.