Advertising Promo - Compliance Issues?

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Question:

We’d like to advertise a promotion that states: "Business and Real Estate Loans from 4.5%. Floating rate for Highest Quality Credits." Will there be any compliance issues, such as trigger terms, etc?

Answer:

Will the real estate loans be consumer-purpose? If so, the advertising rules of Reg Z will come into play and you'll definitely have some issues to deal with from having the 4.5% rate in the ad (triggering term under Reg Z). Will the real estate loans be housing-related? If so, you'll need the equal housing lender logo and legend. From a UDAP (Unfair and Deceptive Acts & Practices) standpoint, what is considered "Highest Quality Credits"? How do I know if I'll get a floating rate or not? Sounds like you need to run this ad past your compliance staff and legal advisors before you run with it.

First published on BankersOnline.com 2/08/10