§ 222.71 Definitions.

For purposes of this subpart, the following definitions apply: (a) Adverse action has the same meaning as in 15 U.S.C. 1681a(k)(1)(A). (b) Annual percentage rate has the same meaning as in 12 CFR 226.14(b) with respect to an open-end credit plan and as in 12 CFR 226.22 with respect to closed-end credit. (c) Closed-end credit has the same meaning as in 12 CFR 226.2(a)(10). (d) Consumer has the same meaning as in 15 U.S.C. 1681a(c). (e) Consummation has the same meaning as in 12 CFR 226.2(a)(13). (f) Consumer report has the same meaning as in 15 U.S.C. 1681a(d). (g) Consumer reporting agency has the same meaning as in 15 U.S.C. 1681a(f). (h) Credit has the same meaning as in 15 U.S.C. 1681a(r)(5). (i) Creditor has the same meaning as in 15 U.S.C. 1681a(r)(5). (j) Credit card has the same meaning as in 15 U.S.C. 1681a(r)(2). (k) Credit card issuer has the same meaning as in 15 U.S.C. 1681a(r)(1)(A). (l) Credit score has the same meaning as in 15 U.S.C. 1681g(f)(2)(A). (m) Firm offer of credit has the same meaning as in 15 U.S.C. 1681a(l). (n) Material terms means— (1) (i) Except as otherwise provided in paragraphs (n)(1)(ii) and (n)(3) of this section, in the case of credit extended under an open-end credit plan, the annual percentage rate required to be disclosed under 12 CFR 226.6(a)(1)(ii) or 12 CFR 226.6(b)(2)(i), excluding any temporary initial rate that is lower than the rate that will apply after the temporary rate expires, any penalty rate that will apply upon the occurrence of one or more specific events, such as a late payment or an extension of credit that exceeds the credit limit, and any fixed annual percentage rate option for a home equity line of credit; (ii) In the case of a credit card (other than a credit card that is used to access a home equity line of credit or a charge card), the annual percentage rate required to be disclosed under 12 CFR 226.6(b)(2)(i) that applies to purchases (“purchase annual percentage rate”) and no other annual percentage rate, or in the case of a credit card that has no purchase annual percentage rate, the annual percentage rate that varies based on information in a consumer report and that has the most significant financial impact on consumers; (2) In the case of closed-end credit, the annual percentage rate required to be disclosed under 12 CFR 226.17(c) and 226.18(e); and (3) In the case of credit for which there is no annual percentage rate, the financial term that varies based on information in a consumer report and that has the most significant financial impact on consumers, such as a deposit required in connection with credit extended by a telephone company or utility or an annual membership fee for a charge card. (o) Materially less favorable means, when applied to material terms, that the terms granted, extended, or otherwise provided to a consumer differ from the terms granted, extended, or otherwise provided to another consumer from or through the same person such that the cost of credit to the first consumer would be significantly greater than the cost of credit granted, extended, or otherwise provided to the other consumer. For purposes of this definition, factors relevant to determining the significance of a difference in cost include the type of credit product, the term of the credit extension, if any, and the extent of the difference between the material terms granted, extended, or otherwise provided to the two consumers. (p) Open-end credit plan has the same meaning as in 15 U.S.C. 1602(i), as interpreted by the Board of Governors of the Federal Reserve System in Regulation Z (12 CFR part 226) and the Official Staff Commentary to Regulation Z (Supplement I to 12 CFR Part 226). (q) Person has the same meaning as in 15 U.S.C. 1681a(b).