12 C.F.R. § 226.6 Initial disclosure statement.
Title 12 - Banks and Banking
The creditor shall disclose to the consumer, in terminology consistent with that to be used on the periodic statement, each of the following items, to the extent applicable: (a) Finance charge. The circumstances under which a finance charge will be imposed and an explanation of how it will be determined, as follows: (1) A statement of when finance charges begin to accrue, including an explanation of whether or not any time period exists within which any credit extended may be repaid without incurring a finance charge. If such a time period is provided, a creditor may, at its option and without disclosure, impose no finance charge when payment is received after the time period's expiration. (2) A disclosure of each periodic rate that may be used to compute the finance charge, the range of balances to which it is applicable,11 11 A creditor is not required to adjust the range of balances disclosure to reflect the balance below which only a minimum charge applies. 12 If a creditor is offering a variable rate plan, the creditor shall also disclose: (1) The circumstances under which the rate(s) may increase; (2) any limitations on the increase; and (3) the effect(s) of an increase. (3) An explanation of the method used to determine the balance on which the finance charge may be computed. (4) An explanation of how the amount of any finance charge will be determined,13 13 If no finance charge is imposed when the outstanding balance is less than a certain amount, no disclosure is required of that fact or of the balance below which no finance charge will be imposed. (b) Other charges. The amount of any charge other than a finance charge that may be imposed as part of the plan, or an explanation of how the charge will be determined. (c) Security interests. The fact that the creditor has or will acquire a security interest in the property purchased under the plan, or in other property identified by item or type. (d) Statement of billing rights. A statement that outlines the consumer's rights and the creditor's responsibilities under §§226.12(c) and 226.13 and that is substantially similar to the statement found in appendix G. (e) Home equity plan information. The following disclosures described in §226.5b(d), as applicable: (1) A statement of the conditions under which the creditor may take certain action, as described in §226.5b(d)(4)(i), such as terminating the plan or changing the terms. (2) The payment information described in §226.5b(d)(5) (i) and (ii) for both the draw period and any repayment period. (3) A statement that negative amortization may occur as described in §226.5b(d)(9). (4) A statement of any transaction requirements as described in §226.5b(d)(10). (5) A statement regarding the tax implications as described in §226.5b(d)(11). (6) A statement that the annual percentage rate imposed under the plan does not include costs other than interest as described in §§226.5b(d)(6) and (d)(12)(ii). (7) The variable-rate disclosures described in §226.5b(d)(12) (viii), (x), (xi), and (xii), as well as the disclosure described in §226.5b(d)(5)(iii), unless the disclosures provided with the application were in a form the consumer could keep and included a representative payment example for the category of payment option chosen by the consumer. [Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 54 FR 24688, June 9, 1989]
Title 12: Banks and Banking
PART 226—TRUTH IN LENDING (REGULATION Z)
Subpart B—Open-End Credit
§ 226.6 Initial disclosure statement.
