1. (a) Closed-ended credit term advertising.

   1. (1) The Federal Reserve System and the Federal Trade Commission are two (2) agencies involved with the enforcement of federal Regulation Z.

   2. (2)

      1. (A) If an advertisement promoting closed-end credit sale on a motor vehicle purchase contains any of the following terms:

2. (i) The amount of the down payment expressed either as a percentage or dollar amount;

   1. (ii) The amount of any payment expressed as a percentage or dollar amount;

      1. (iii) The number of payments;

         1. (iv) The period of repayment; or
         2. (v) The amount of any finance charge.

      2. (B) Then the following terms must be disclosed:

         1. (i) Amount or percentage of down payment;
         2. (ii) Terms of repayment; and
         3. (iii) Annual percentage rate, using the term or the abbreviation “APR”.

3. (b) Lease advertising.

   1. (1) The word “lease” or “smart buy” must appear in a prominent position in the advertisement.
   2. (2) Advertising that involves consumer leases falls under federal Regulation M.

   3. (3)

      1. (A) If an advertisement promoting a consumer lease on a motor vehicle contains any of the following terms:

         1. (i) The amount of any payment; or
         2. (ii) A statement of any capitalized cost reduction or other payment required prior to or at consummation or delivery.

      2. (B) Then the following terms must be disclosed:

         1. (i) That the advertised transaction is a lease;
         2. (ii) The total amount due prior to or at consummation or delivery;
         3. (iii) The number, amounts, and due dates or periods of scheduled payments;
         4. (iv) A statement of whether or not a security deposit is required; and
         5. (v) A statement that an extra charge may be imposed at the end of the lease term where the lessee’s liability, if any, is based on the difference between the residual value of the leased property and its realized value at the end of the lease term.
         6. (c) Open-ended credit terms.

   4. (1)

      1. (A) Examples of open-end credit are bank and gas company credit cards and stores' revolving charge accounts.
      2. (B) In open-end credit, the creditor reasonably expects the customer to make repeated transactions.

   5. (2) The triggering terms for open-ended credit are:

      1. (A) Statement of when the finance charge begins to accrue, including any "free ride" period, if any;
      2. (B) Statement of either the periodic rate used to compute the finance charge or the annual percentage rate;
      3. (C) The method of determining the balance on which a finance charge may be imposed;
      4. (D) The method of determining the finance charge, including a description of how any finance charge other than the periodic rate will be determined;
      5. (E) The amount of any charge, other than the finance charge, that may be imposed as part of the plan; and
      6. (F) The fact that the creditor will acquire a security interest.

   6. (3) The required disclosures are:

      1. (A) Any minimum, fixed, transaction, activity, or similar charges that could be imposed;
      2. (B) Any periodic rate that may be applied, expressed as an "annual percentage rate";
      3. (C) If the plan provides for a variable periodic rate, that fact must be stated; and
      4. (D) Any membership or participation fee.

Codification Notes: Regulation Z referred to in this section is codified at 12 C.F.R. pt. 226. Regulation M referred to in this section is codified at 12 C.F.R. pt. 213.