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What are the requirements for advertising student loans?
In a follow-up to a recent blog post on Regulation Z requirements for lenders of private education loans, NAFCU's Loran Jackson outlines specific requirements that the regulation also imposes related to solicitations and advertisements for these types of loans in a Compliance Blog post published Friday.
Jackson, NAFCU's regulatory compliance counsel, uses an example of an enthusiastic credit union representative passing out university-branded flyers to advertise loans to students of a local university to determine if these actions are permissible under Regulation Z.
Jackson clarifies that this example implies that the covered education institution endorses the credit union's loans, which is generally prohibited. However, she identifies two scenarios in which the representative may continue to pass out the branded flyers:
- The school has not endorsed the credit union's loans, and the flyers contain a "clear and conspicuous" disclosure that the referenced covered educational institution does not endorse the credit union's loans and is not affiliated with the credit union; and
- The school and the credit union have an endorsed lender arrangement where the school endorses the credit union's loans, and the flyers contain a clear and conspicuous disclosure that the credit union's loans are not offered or made by the covered educational institution, but are made by the credit union.
Jackson highlights that, in addition to limits on co-branding, there are other requirements that apply to solicitations and applications for private education loans.
For more on regulations related to advertising student loans, read Jackson's blog here.