Our bank has a deposit and loan rate sheet that is labeled “for internal use only” and is not to be given to customers. On occasion, a teller or the receptionist will give the sheet to a customer upon request. The sheet has the names of the products, the interest rate, and the APY/APR as applicable, but no disclosures. Would this qualify as advertising? If so, what other information would be required? Is there any chance we are covered because it indicates “for internal use only” and isn’t meant to be distributed to the public?

In our view, an internal rate sheet does constitute an advertisement if it is provided to customers, even if it indicates that it is “for internal use only.”

An advertisement is “a commercial message, appearing in any medium that directly or indirectly promotes” an account or credit transaction. Providing information to customers about your account and loan products indirectly (or directly) will promote those products. In addition, under Regulation DD, externally prepared and published rate sheets are specifically excluded from the definition of advertising, implying that internally prepared rate sheets may be considered advertising.

Similarly, Regulation Z’s advertising definition excludes “informational material, for example, interest-rate and loan-term memos, distributed only to business entities,” implying that such informational material is considered advertising if distributed to customers. Further, in our view, the fact that the rate sheet is labeled for internal use does not preclude it from being considered advertising if the document is, in fact, provided to customers.

Regarding your loan products, Regulation Z’s advertising rules for open-end and closed-end credit require additional disclosures when an advertisement uses certain specified trigger terms. None of the terms you listed (product names, general interest rates, and APRs) are considered trigger terms that necessitate additional disclosures. However, we recommend reviewing your rate sheet for any words or phrases that may be considered trigger terms under Regulation Z, including the amount or percentage of any down payment, the number of payments or period of repayment, the amount of any payment, and the amount of any finance charge.

Regarding your accounts, the annual percentage yield (APY) is a trigger term under Regulation DD. Consequently, if distributed to customers, the rate sheet must clearly and conspicuously state additional information, as applicable, about variable rates, time limits on the APY, minimum balance requirements, minimum opening deposits, effects of fees, and any features of time accounts.

For resources related to our guidance, please see:

Regulation Z, 12 CFR 1026.2(a)(2) (“Advertisement means a commercial message in any medium that promotes, directly or indirectly, a credit transaction.”)

Regulation DD, 12 CFR 1030.2(b) (“Advertisement means a commercial message, appearing in any medium, that promotes directly or indirectly: The availability or terms of, or a deposit in, a new account; and For purposes of §§ 1030.8(a) and 1030.11 of this part, the terms of, or a deposit in, a new or existing account.”)

Official Interpretations, Regulation DD, 12 CFR 1030, Paragraph 2(b), Comment 2(i) (“Examples of messages that are not advertisements are: Rate sheets in a newspaper, periodical, or trade journal (unless the depository institution, or a deposit broker offering accounts at the institution, pays a fee for or otherwise controls publication.) . . .”)

Official Interpretations, Regulation Z, 12 CFR 1026, Paragraph 2(a)(2), Comment 1(ii)(B) (“The term does not include: . . . Informational material, for example, interest-rate and loan-term memos, distributed only to business entities.”)

Regulation Z, 12 CFR 1026.24(d)(1) (“If any of the following terms is set forth in an advertisement, the advertisement shall meet the requirements of paragraph (d)(2) of this section: The amount or percentage of any downpayment. The number of payments or period of repayment. The amount of any payment. The amount of any finance charge.”)

Official Interpretations, Regulation Z, 12 CFR 1026, Paragraph 24(d)(1), Comment 4(ii) (“Statements of the annual percentage rate . . . are not triggering terms under this paragraph.”)

Regulation DD, 12 CFR 1030.8(c) (“Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously: (1) Variable rates . . .(2) Time annual percentage yield is offered. . . . (3) Minimum balance. . . (4) Minimum opening deposit. . . . (5) Effect of fees. . . (6) Features of time accounts. . . .”)