An originator posts on social media: "Rates from 5.99% — DM me." The post carries no NMLSR ID, no APR and no terms. Does omitting the APR from this mortgage rate advertisement comply with Regulation Z?
Correct Answer
B) Non-compliant: a rate quoted in an advertisement pulls in the APR too
B. Quoting the mortgage interest rate without the required APR disclosure is not compliant. A promotional social-media post is not exempt just because it appears on a personal account. For this closed-end credit advertising rule, a stated interest rate must be accompanied by the required annual percentage rate disclosure. “From” does not eliminate that requirement. Scope and exceptions: The question tests Regulation Z rate advertising. Whether a separate NMLS-ID rule is violated depends on its own authority and scope; do not infer it from 1026.24 alone. Source: 1026.24(c), comments 24(c)-1–2 — https://www.consumerfinance.gov/rules-policy/regulations/1026/24/
Why This Is the Correct Answer
B. Quoting the mortgage interest rate without the required APR disclosure is not compliant. A promotional social-media post is not exempt just because it appears on a personal account. For this closed-end credit advertising rule, a stated interest rate must be accompanied by the required annual percentage rate disclosure. “From” does not eliminate that requirement. Scope and exceptions: The question tests Regulation Z rate advertising. Whether a separate NMLS-ID rule is violated depends on its own authority and scope; do not infer it from 1026.24 alone.
Why the Other Options Are Wrong
Option A: Compliant, since the rate is a starting point rather than an offer of terms
A minimum advertised rate is still a stated rate.
Option C: Non-compliant only where somebody actually applies from the post itself
Advertising requirements apply before any viewer submits an application.
Option D: Compliant: a social post is a personal communication and not an ad
An account’s personal label does not make a commercial loan promotion nonadvertising.
Exam Tip
Evaluate what a communication promotes, not only where it is posted.
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