Question 45

No payment until June

The phrase "no payment until June" in an advertisement triggers the requirement for full disclosure of credit terms under Regulation Z. This regulation mandates that any advertisement suggesting a deferred payment must clearly outline all relevant credit terms.

A) no payment until June

This option is correct because it implies a delay in payment, which necessitates full disclosure of the terms associated with that credit offer. Regulation Z specifically states that any advertisement featuring such phrases must provide clear information about the terms of the credit being offered, including interest rates and any applicable fees.

B) low down payment

This option is incorrect because while it suggests a favorable financial arrangement, it does not indicate a deferral of payment. Regulation Z does not require full disclosure if the advertisement only refers to down payments without suggesting that payments will be postponed.

C) only $500 per month

This phrase is also incorrect as it mentions a monthly payment amount but does not imply that the payment is deferred. Although this option may require some disclosures regarding total costs and terms, it does not trigger the same level of full disclosure as the phrase in the correct answer.

D) no extra charges

This option is incorrect because it does not indicate any deferral of payments or conditions that would necessitate a full disclosure of credit terms. It simply suggests that there are no additional fees, which does not fall under the same regulatory requirements as a deferred payment scenario.

Conclusion

The phrase "no payment until June" is the only option that explicitly suggests a delay in payment, thereby necessitating comprehensive disclosure of credit terms under Regulation Z. The other options either refer to payment conditions that do not require such disclosures or do not imply any deferred payment at all. Therefore, all other options fail to meet the criteria set forth by the regulation.