Also known as: annual percentage rates · APR · APRs
Written by attorneys · grounded in primary & secondary sources — see below
A measure of the total cost of borrowing expressed as an annualized interest rate that incorporates fees and finance charges according to a standardized formula.
MetroBank markets credit cards to residents of Hamilton. The state statute requires the bank to certify that its annual percentage rates for Hamilton customers match its lowest rates offered anywhere else. The bank must either adjust its nationwide pricing or forgo the Hamilton market.
Granite Bank offers cards in Fairmont. The statute ties Fairmont rates to the bank's lowest rates in any state. Raising rates elsewhere would force the bank to raise Fairmont rates or exit the market entirely.
Apex Dynamics advertises open-end credit. The issuer must disclose the annual percentage rate using the standardized TILA formula on periodic statements so cardholders can compare total borrowing costs.
Select any source to read its text and confirm it supports the definition.
The statute effectively controls pricing decisions in other states by conditioning market access on nationwide rate parity. This extraterritorial regulation is invalid regardless of consumer-protection motives.
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Creditors must disclose the annual percentage rate using a standardized formula both in advertising and on periodic statements so consumers can assess the true cost of borrowing.
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No. Conditioning access to the state market on nationwide pricing still projects regulatory power into out-of-state transactions and remains invalid.
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