Real Estate Advertising - A Labyrinth Of Regulations

While various advertising regulations are not new, these provisions can be difficult to apply, especially in the context of mortgages and other real-estate secured products. Regulation Z's advertising rules are particularly convoluted, while the National Credit Union Administration (NCUA) advertising rule is quite broad. However, taking a step-by-step approach to reviewing real estate ads can help a credit union stay compliant with its marketing efforts.

Initial Steps

Keep in mind that both Regulation Z and NCUA's regulations define "advertisement" quite broadly to include commercial messages that promote a product, whether directly or indirectly. Because ads market a variety of unique products, the rules can be difficult to apply. Regulation Z has different advertising rules for loans based on the product terms. There are a few questions to consider that will determine which disclosures and formatting requirements may be required for a particular ad. For example, what kind of mortgage is the ad promoting - open-end or closed-end?  Also, there are particular rules for products with a variable or promotional rate and certain terms can "trigger" additional disclosures when used in the ad. In other words, it is important to know all of the details about the product the advertisement is promoting because this will determine which parts of Regulation Z apply to the ad including disclosure and formatting requirements.