§ 14A-3-312. Advertising.

(1)  No lender shall engage in this state in false or misleading advertising concerning the terms or conditions of credit with respect to a consumer loan.

(2)  Without limiting the generality of subsection (1), and without requiring a statement of rate of loan finance charge if the loan finance charge is not more than Five Dollars ($5.00) when the principal does not exceed Seventy-five Dollars ($75.00), or Seven Dollars and fifty cents ($7.50) when the principal exceeds Seventy-five Dollars ($75.00), an advertisement with respect to a consumer credit loan made by the posting of a public sign, or by catalog, magazine, newspaper, radio, television, or similar mass media, is misleading if:

(a)it states the rate of the loan finance charge and the rate is not stated in the form required by the provisions on calculation of rate to be disclosed (Section 3-304), or

(b)it states the dollar amounts of the loan finance charge or installment payments, and does not also state the rate of any loan finance charge and the terms of repayment.

(3)  In this section a catalog or other multiple-page advertisement is considered a single advertisement if it clearly and conspicuously displays a credit terms table setting forth the information required by this section.

(4)  This section imposes no liability on the owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated.

(5)  Advertising which complies with the Federal Consumer Credit Protection Act does not violate subsection (2).

(6)  The provisions of this section shall not apply to advertisements of residential real estate except to the extent provided by rules of the Administrator.

(7)  If any advertisement to aid, promote, or assist, directly or indirectly, the extension of consumer credit through a revolving loan account plan under which extensions of credit are secured by the consumer's principal dwelling states, affirmatively or negatively, any of the specific terms of the plan, including any periodic payment amount required under such plan, such advertisement shall also clearly and conspicuously set forth the following information, in such form and manner as the Administrator may require:

(a)Any loan fee the amount of which is determined as a percentage of the credit limit applicable to an account under the plan and an estimate of the aggregate amount of other fees for opening the account, based on the creditor's experience with the plan and stated as a single amount or as a reasonable range,

(b)In any case in which periodic rates may be used to compute the loan finance charge, the periodic rates expressed as an annual percentage rate,

(c)The highest annual percentage rate which may be imposed under the plan, and

(d)Any other information the Administrator may by rule require.

(8)  If any advertisement described in subsection (7) of this section contains a statement that any interest expense incurred with respect to the plan is or may be tax deductible, the advertisement shall not be misleading with respect to such deductibility.

(9)  No advertisement described in subsection (7) of this section with respect to any home equity account may refer to such credit as "free money" or use other terms determined by the Administrator by rule to be misleading.

(10)(a)If any advertisement described in subsection (7) of this section includes an initial annual percentage rate that is not determined by the index or formula used to make later interest rate adjustments, the advertisement shall also state with equal prominence the current annual percentage rate that would have been applied using the index or formula if such initial rate had not been offered,

(b)The annual percentage rate required to be disclosed under the paragraph (a) rate of this subsection rate must be current as of a reasonable time given the media involved, and

(c)Any advertisement to which paragraph (a) of this subsection applies shall also state the period of time during which the initial annual percentage rate referred to in such paragraph will be in effect.

(11)  If any advertisement described in subsection (7) of this section contains a statement regarding the minimum monthly payment under the plan, the advertisement shall also disclose, if applicable, the fact that the plan includes a balloon payment.

(12)  For purposes of this section and Section 3-309.2 of this title, the term "balloon payment" means, with respect to any revolving charge account plan under which extensions of credit are secured by the consumer's principal dwelling, any repayment option under which:

(a)the account holder is required to repay the entire amount of any outstanding balance as of a specified date or at the end of a specified period of time, as determined in accordance with the terms of the agreement pursuant to which such credit is extended, and

(b)the aggregate amount of the minimum periodic payments required would not fully amortize such outstanding balance by such date or at the end of such period.

Added by Laws 1969, c. 352, § 3-312, eff. July 1, 1969.  Amended by Laws 1982, c. 335, § 45, operative Oct. 1, 1982; Laws 1990, c. 260, § 27, operative July 1, 1990.