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ADVERTISING COMPLIANCE CHECKLIST

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					               ADVERTISING COMPLIANCE CHECKLIST // Home Equity Line of Credit Loans

Complete this checklist for each advertisement by the Credit Union. If the Credit Union is reviewing an
advertisement on its web site, insure that you review each “page” for full compliance.


Question // Issue to Consider      Action to be Taken                            Completed
                                                                                 By Credit Union
                                                                                 (Initial / Check)
A. Does the advertisement          Diversity Considerations or No Preferences
refrain from indicating a          Reflected. See, Beginning Page 60 of the
preference for a particular        Advertising Guide if you need further
segment of the population on a     information to assess this question.
prohibited basis?
B. Truthfulness: Is the            Be sure all statements the Credit Union
advertisement accurate and         makes are in all respects TRUE.
not misleading? Are the terms
actually available?
C. Federal Credit Unions must      See, Pages 60-61 of the Advertising Guide
use the logo pursuant to 12        for an Explanation; and the Subfolder in
CFR §701.31. Does the logo         CUPP IX // Subfolder -- Logo Examples
meet the specific size
requirements applicable per
HUD Guidelines?

Is the purpose of the loan
advertised for home
improvements, even though no
mortgage or other security is
to be obtained by the Credit
Union? If yes, insure
compliance with the Equal
Housing Logo and slogan
requirements as set forth
above.
D. Is the advertisement “clear     [Common Sense Standard at present, but
and conspicuous” (i.e., legible    should try to keep at 8-point font size or
and easily understood)?            larger in light of other analogous laws.
                                   SEE BEGINNING PAGE 31 OF THE GUIDE
                                   FOR DETAILS TO HELP YOU ASSESS
                                   THIS.
E. Are advertised consumer loan
rates expressed as either an
“Annual Percentage Rate” or an
“APR”? Is this disclosure more
conspicuous than other
required disclosures?
F. Do advertisements for                           EXAMPLE:
variable-rate consumer credit                  “The APR may vary.”
disclose that the APR may be
increased after the loan is        NOTE: In an ad that contains a trigger term
closed?                            (see below), the Credit Union must:

                                   •      Use an insert showing the current
                                   APR;
                                   •      Give the APR as of a specified date;
                                   or
                                     •    Disclose an estimated APR.
G. Does the description of the     Real Estate Loans should not be subject to
loan imply that it IS subject to   cross-collateralization due to Consumer

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cross-collateralization?            Regulatory Considerations and also Due to
                                    US Bankruptcy Code considerations.
H. Does the Credit Union            Note Required – but recommended:
reserve the right to change         Example: “Programs, rates, terms and
rates // terms?                     conditions are subject to change without
                                    notice.”
I. Does the advertisement           If an advertisement for an open-end credit
include ANY of the following        line contains one or more of the above
“trigger terms”:                    trigger terms, then the advertisement also
 The Annual Percentage Rate       must disclose the following information:
or APR?
A description of the               Any minimum, fixed, transaction, activity or
circumstances under which a           similar charge that the Credit Union could
finance charge will be imposed,       impose.
or how it is to be determined;
mention of the APR, periodic         Any periodic rate that the Credit Union may
rate, or any grace period? For        apply, expressed as an annual percentage
example:                              rate, and, if applicable, that the rate is
• “There’s just a small monthly       variable.
charge on your outstanding
balance.”                            Any membership or participation fee that
• “Pay only 1 percent per month       the Credit Union could impose. NOTE:
on the amount of credit you use.”     Does not include membership in the
• Any representation about a          Credit Union.
grace period.
                                     Any loan fee that is a percentage of the
A description of any                credit limit under the plan, and an estimate
circumstances under which a           of any other fees imposed for opening the
finance charge would not be           plan, stated either as a single dollar
imposed? For example:                 amount or a reasonable range.
• “There are no finance charges
for the first month.”                Any periodic rate used to compute the
• “There’s no finance charge if       finance charge, expressed as an annual
you deposit funds into your           percentage rate.
checking account to cover an
overdraft on the same day.”          Maximum annual percentage rate that may
                                      be charged, if the plan is a variable-rate
 The amounts of any other            plan.
charges that might be imposed,
or an explanation of how they
would be determined? For
example:
• “No Closing Cost” “Closing
Costs will not exceed $500.00”
“No Attorneys Fees for Loans
Over $25,000”

 Any of the information
applicable to the plan for the
draw period or the repayment
period, for example:
• “You pay only 1/60 of your
balance each month”
• “You can draw against your
credit line any time during the
first five years after closing”
J. Discounted and premium           Example: 0.00 % APR for the first 12-months.*
rates: If an ad advertises a
variable rate and an initial rate   *4.75% is the regular APR that would apply if
not based on the index for later    this special rate was not offered.
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adjustments, it must state the
effective time period for the initial
rate and, with equal prominence,
the APR.
K. Is this a Television or Radio              If yes, please review your disclosure
   Advertisement”?                            options on beginning on Page 34
                                              Advertising Guide.
                              EXAMPLE OF COMPLIANT OPEN-END HELOC ADVERTISEMENT
                                ABC Federal Credit Union Home Equity Line of Credit Plan

                                                      RATES AS LOW AS PRIME
   *The prime rate is the highest prime rate published in the “Money Rates Table” of the Wall Street Journal on the last business
 day of each quarter. Prime is a variable rate; as it changes, the APR on your account will also change. This special rate will be
  in effect until June 1, 2010. Thereafter, the APR will be based on the prime rate plus a margin of up to 3.5%. If the special rate
 was not offered, the present APR could be as much as 12.00%. The maximum APR that can apply is 18.00%. Credit is subject
 to approval. A home equity line of credit is secured by a first or second mortgage lien on your home, which must be one-to-four
 family residential real estate. This type of credit is not available for modular homes, manufactured homes or cooperatives. The
 minimum line of credit amount is $10,000, and the minimum loan amount is $5,000 for the first advance and $500 thereafter. [If
   applicable add – loan fees and closing costs vary up to $______________.] Flood and /or property hazard insurance may be
required. Other restrictions may apply. The present APR of 8.50% is current as of April 30, 2010. All Credit Union loan programs,
                             rates, terms and conditions are subject to change at any time without notice.

                                  [IF APPLICABLE, ADD A REFERENCE TO ANY STATE LAWS HERE.]

Approved By Compliance:                                              Date:




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