A CFL licensee advertises a closed-end consumer loan primarily in California at “rates from 5.49%.” It omits both disclosure of the license under which the loan is made and the APR. What two disclosure problems arise?
Correct Answer
C) Missing California license disclosure and missing APR under the rate-advertising rule
Financial Code section 22162 requires disclosure of the license under which the loan is made or arranged. Regulation Z section 1026.24(c) separately requires an advertised rate to be stated as an APR. This rate rule is distinct from the listed triggering terms in subsection (d). Source: Cal. Fin. Code § 22162(a); 12 CFR 1026.24(c)
Why This Is the Correct Answer
Financial Code section 22162 requires disclosure of the license under which the loan is made or arranged. Regulation Z section 1026.24(c) separately requires an advertised rate to be stated as an APR. This rate rule is distinct from the listed triggering terms in subsection (d). Source: Cal. Fin. Code § 22162(a); 12 CFR 1026.24(c)
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