Regulation Z (Truth in Lending Act) trigger terms are specific, numerical, or financial information in advertisements that require additional, mandatory disclosures about loan terms (12 CFR 1026.24). Key triggers for closed-end credit include downpayment amounts, payment amounts, the number of payments, repayment periods, or finance charges.
Thankfully, Regulation Z (1026.24(d)(1)) does a good job of defining what is actually meant by a closed-end loan triggering terms, including: the amount or percentage of any downpayment, the number of payments or period of repayment, the amount of any payment, and the amount of any finance charge.
Triggering Terms and Additional Disclosures
The following terms in closed-end credit advertisements trigger the requirement for additional disclosures: Down payment: A reference to a down payment in an advertisement acts as a triggering term only if a down payment is actually required for the credit product.
Examples of Triggering Terms
The number of payments (example: "60 monthly payments and you're paid up" or "12 small payments is all you owe") The total time required to pay and the period of repayment (example: "5-year loans available" or "just 36 low monthly payments")
The most common violations involve the use of a "triggering term," as defined in Regulation Z, without the disclosure of all the additional terms required when an advertisement uses a triggering term. A common triggering term is "0% APR."
1. Trigger terms. Negative as well as affirmative references trigger the requirement for additional information. For example, if a creditor states no annual fee, no points, or we waive closing costs in an advertisement, additional information must be provided.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
The 2/3/4 rule is a guideline, primarily used by Bank of America, that limits how many new credit cards you can get: no more than 2 in 30 days, 3 in 12 months, and 4 in 24 months, helping to prevent over-application and manage hard inquiries on your credit report. While not universal, it's a useful benchmark for responsible card application, though other banks have different rules (like Chase's 5/24 rule).
TILA and Regulation Z: Top 10 Material Violations
Total of payments, Payment schedule, Prepayment/late payment penalties, If applicable to the transaction: (1) Total sales cost, (2) Demand feature, (3) Security interest, (4) Insurance, (5) Required deposit, and (6) Reference to contract.
The examination procedures will use “TILA” interchangeably for Truth-in-Lending Act and Regulation Z, since Regulation Z is the implementing regulation. Unless otherwise specified, all of the regulation references are to Regulation Z ( 12 CFR 1026 ).
The five M's are: Mission (objective), Money (budget), Message (content), Media (channel), and Measurement (effectiveness). Together, properly understanding and balancing these five factors can help create more effective advertising that achieves the company's goals and positively impacts the target audience.
What financing terms can advertised without triggering all the financing disclosure required by regulation Z? Price and APR; Under the Truth in Lending Act's Regulation Z, price and APR are the only financing terms that can be advertised without triggering the full disclosure required by law.
The "7% rule" in real estate typically refers to a quick screening tool where an investor checks if a rental property's gross annual rent is at least 7% of its purchase price, indicating a potentially solid income investment, though it's not a substitute for detailed analysis; however, other "7 rules" exist, like those focusing on agent performance (top 7% of agents do most business) or key investment principles (due diligence, diversification, market awareness, clear strategy) for long-term success.
This is not an exhaustive list, but here are a few common triggers:
Powerful words often evoke emotion, promise results, or build trust, with examples including discover, proven, guarantee, you, save, free, new, imagine, success, and secret, but the best ones depend on context, aiming for impact like resolve, spearhead, essential, or difference. Words like you, results, guarantee, and save focus on the listener's benefits, while discover, proven, and new create intrigue, and terms like resolve or spearhead show strong action.
Here's a list of trigger words to convey desire:
The triggering terms include charges imposed under a non-home secured credit plan such as finance charges, late fees, over-the-limit fees, returned item fees, fees for obtaining a cash advance, fees to obtain additional or replacement cards, expedited card delivery fees, application and membership fees, annual and ...
To waive a credit card annual fee, call the issuer before it charges, politely ask for a waiver or "retention offer" (like points or statement credit), citing your loyalty or limited use, and be prepared to downgrade the card to a no-fee version if they decline, but always try to get the fee waived first for the best benefits.
Ways to avoid or limit credit card interest