SECTION 160:45-3-14. Advertising

(a)   Actually available terms. If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor.

(b)   Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under 160:45-3-4 is set forth in an advertisement, the advertisement shall also clearly and conspicuously set forth the following 36d/

(1)   Any minimum, fixed, transaction, activity or similar charge that could be imposed.

(2)   Any periodic rate that may be applied expressed as an annual percentage rate as determined under 160:45-3-12(b). If the plan provides for a variable periodic rate, that fact shall be disclosed.

(3)   Any membership or participation fee that could be imposed.

(c)   Catalogs or other multiple-page advertisements; electronic advertisements.

(1)   If a catalog or other multiple-page advertisement, or an electronic advertisement (such as an advertisement appearing on an Internet Web site), gives information in a table or schedule in sufficient detail to permit determination of the disclosures required by paragraph (b) of this section, it shall be considered a single advertisement if:

(A)   The table or schedule is clearly and conspicuously set forth; and

(B)   Any statement of terms set forth in 160:45-3-4 appearing anywhere else in the catalog or advertisement clearly refers to the page or location where the table or schedule begins.

(2)   A catalog or other multiple-page advertisement or an electronic advertisement (such as an advertisement appearing on an Internet Web site) complies with this paragraph if the table or schedule of terms includes all appropriate disclosures for a representative scale of amounts up to the level of the more commonly sold higher-priced property or services offered.

(d)   Additional requirements for home-equity plans.

(1)   Advertisement of terms that require additional disclosures. If any of the terms required to be disclosed under 160:45-3-4(1) or (2) or the payment terms of the plan are set forth, affirmatively or negatively, in an advertisement for a home-equity plan subject to the requirements of 160:45-3-3, the advertisement also shall clearly and conspicuously set forth the following:

(A)   Any loan fee that is a percentage of the credit limit under the plan and an estimate of any other fees imposed for opening the plan, stated as a single dollar amount or a reasonable range.

(B)   Any periodic rate used to compute the finance charge, expressed as an annual percentage rate as determined under 160:45-3-12(b).

(C)   The maximum annual percentage rate that may be imposed in a variable-rate plan.

(2)   Discounted and premium rates. If an advertisement states an initial annual percentage rate that is not based on the index and margin used to make later rate adjustments in a variable-rate plan, the advertisement also shall state with equal prominence and in close proximity to the initial rate:

(A)   The period of time such initial rate will be in effect; and

(B)   A reasonably current annual percentage rate that would have been in effect using the index and margin.

(3)   Balloon payment. If an advertisement contains a statement of any minimum periodic payment and a balloon payment may result if only the minimum periodic payments are made, even if such a payment is uncertain or unlikely, the advertisement shall also state with equal prominence and in close proximity to the minimum periodic payment statement that a balloon payment may result, if applicable. 36e/ A balloon payment results if paying the minimum periodic payments does not fully amortize the outstanding balance by a specified date or time, and the consumer is required to repay the entire outstanding balance at such time. If a balloon payment will occur when the consumer makes only the minimum payments required under the plan, an advertisement for such a program which contains any statement of any minimum periodic payment shall also state with equal prominence and in close proximity to the minimum period payment statement:

(A)   That a balloon payment will result; and

(B)   The amount and timing of the balloon payment that will result if the consumer makes only the minimum payments for the maximum period of time that the consumer is permitted to make such payments.

(4)   Tax implications. An advertisement that states that any interest expense incurred under the home-equity plan is or may be tax deductible may not be misleading in this regard. If an advertisement distributed in paper form or through the Internet (rather than by radio or television) is for a home-equity plan secured by the consumer's principal dwelling, and the advertisement states that the advertised extension of credit may exceed the fair market value of the dwelling, the advertisement shall clearly and conspicuously state that:

(A)   The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and

(B)   The consumer should consult a tax adviser for further information regarding the deductibility of interest and charges.

(5)   Misleading terms. An advertisement may not refer to a home-equity plan as "free money" or contain a similarly misleading term.

(6)   Promotional rates and payments.

(A)   Definitions. The following definitions apply for purposes of paragraph (d)(6) of this section:

(i)   Promotional rate. The term "promotional rate" means, in a variable-rate plan, any annual percentage rate that is not based on the index and margin that will be used to make rate adjustments under the plan, if that rate is less than a reasonably current annual percentage rate that would be in effect under the index and margin that will be used to make rate adjustments under the plan.

(ii)   Promotional payment. The term "promotional payment" means:

(I)   For a variable-rate plan, any minimum payment applicable for a promotional period that is not derived by applying the index and margin to the outstanding balance when such index and margin will be used to determine other minimum payments under the plan; and is less than other minimum payments under the plan derived by applying a reasonably current index and margin that will be used to determine the amount of such payments, given an assumed balance.

(II)   For a plan other than a variable-rate plan, any minimum payment applicable for a promotional period if that payment is less than other payments required under the plan given an assumed balance.

(iii)   Promotional period. A "promotional period" means a period of time, less than the full term of the loan, that the promotional rate or promotional payment may be applicable.

(B)   Stating the promotional period and post-promotional rate or payments. If any annual percentage rate that may be applied to a plan is a promotional rate, or if any payment applicable to a plan is a promotional payment, the following must be disclosed in any advertisement, other than television or radio advertisements, in a clear and conspicuous manner with equal prominence and in close proximity to each listing of the promotional rate or payment:

(i)   The period of time during which the promotional rate or promotional payment will apply;

(ii)   In the case of a promotional rate, any annual percentage rate that will apply under the plan. If such rate is variable, the annual percentage rate must be disclosed in accordance with the accuracy standards in 160:45-3-3, or 160:45-3-14(b)(2) as applicable; and

(iii)   In the case of a promotional payment, the amounts and time periods of any payments that will apply under the plan. In variable-rate transactions, payments that will be determined based on application of an index and margin shall be disclosed based on a reasonably current index and margin.

(C)   Envelope excluded. The requirements in paragraph (d)(6)(B) of this section do not apply to an envelope in which an application or solicitation is mailed, or to a banner advertisement or pop-up advertisement linked to an application or solicitation provided electronically.

(e)   Alternative disclosures - television or radio advertisements. An advertisement for a home-equity plan subject to the requirements of 160:45-3-3 made through television or radio stating any of the terms requiring additional disclosures under paragraph (b) or (d)(1) of this section may alternatively comply with paragraph (b) or (d)(1) of this section by stating the information required by paragraph (b)(2) of this section or paragraph (d)(1)(B) of this section, as applicable, and listing a toll-free telephone number, or any telephone number that allows a consumer to reverse the phone charges when calling for information, along with a reference that such number may be used by consumers to obtain additional cost information.

36d/  The disclosures given in accordance with 160:45-3-2 do not constitute advertising terms for the purposes of the requirements of this Section.

36e/  A balloon payment results if paying the minimum periodic payments does not fully amortize the outstanding balance by a specified date or time, and the consumer must repay the entire outstanding balance at such time.

[Source: Amended at 17 Ok Reg 1587, eff 5-25-00; Amended at 21 Ok Reg 2678, eff 7-12-04; Amended at 25 Ok Reg 2164, eff 7-11-08; Amended at 26 Ok Reg 2474, eff 7-11-09]

Note

EDITOR’S NOTE: Due to technical error, when the 7-12-04 amendments to this Section (160:45-3-14) were published in the 2004 OAC Supplement, the footnotes in the Section were not replaced, resulting in the publication of two sets of footnotes in both the 2004 and 2005 OAC Supplements. Because the two 36d/ footnotes were identical, the second 36d/ footnote was editorially removed when the rule was published again in the 2006 Edition of the OAC. However, because the two 36e/ footnotes were not identical, both versions of footnote 36e/ were retained until this section was amended again on 7-11-08.