Which advertisement would trigger the requirement to disclose all finance charges and the true APR under Regulation Z?

The rationale for selecting the advertisement that refers to "monthly payments under $700" as triggering the requirement to disclose all finance charges and the true Annual Percentage Rate (APR) under Regulation Z stems from the specific guidelines established for advertising related to credit terms.

Regulation Z, which implements the Truth in Lending Act (TILA), mandates that if an advertisement mentions specific credit terms, such as a particular monthly payment amount or any associated terms of credit, then the advertisement must also disclose relevant financing charges and the APR. This requirement ensures that consumers receive a clear and complete picture of the cost of borrowing, fostering transparency and responsible lending practices.

In this case, stating a specific monthly payment indicates that the advertisement is promoting credit terms that could affect a consumer's decision to enter into a loan. As such, it compels the lender to provide additional information about finance charges and the true cost of the loan, ensuring compliance with federal regulations aimed at protecting consumers.

The other options—mentioning interest rates, urging to stop paying rent, or highlighting no down payment—do not by themselves create the same trigger for detailed disclosures because they do not specify a loan term like a monthly payment amount does. While these phrases can certainly be part of financial marketing, they do not