source:
  type: regulation
  id: reg-z-1026.22
  authority: 12 CFR §1026.22 — Determination of annual percentage rate
  description: 'Regulation Z §1026.22 sets the computational rules and accuracy

    tolerances for the disclosed Annual Percentage Rate on closed-end

    consumer credit transactions: the APR must be determined under

    either the actuarial method or the United States Rule method

    (appendix J supplies the actuarial-method instructions and

    equations). General accuracy tolerance is ±1/8 of 1 percentage

    point; irregular-transaction tolerance is ±1/4 of 1 percentage

    point. For mortgage loans secured by real property or a dwelling,

    additional tolerances apply where the APR variance results from a

    finance-charge variance that is itself accurate under

    §1026.18(d)(1), §1026.38(o)(2), or §1026.23(g)/(h). Permitted

    computation tools include the CFPB-issued APR Tables and any other

    computation tool whose result matches appendix J within the

    accuracy tolerances. Subsection (c) addresses single add-on rate

    transactions; (d) addresses certain ranges-of-balances transactions

    (e.g., mail/telephone-order delays under §1026.17(g)(4), series-of-

    sales delays under §1026.17(h)). The (a)(1) calculation-tool error

    safe harbor requires prompt discontinuation upon discovery and

    written Bureau notification.

    '
obligations:
- id: reg-z-1026.22-a
  canonical_id: reg-z-1026.22-a
  section: 12 CFR §1026.22 — Determination of annua
  description: '(a): (a) Accuracy of annual percentage rate. (1) The annual percentage rate is a measure
    of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received
    by the consumer to the amount and timing of payments made. The annual percentage rate shall be determined
    in acc…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: '(a) Accuracy of annual percentage rate. (1) The annual percentage rate is a measure
      of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received
      by the consumer to the amount and timing of payments made. The annual percentage rate shall be determined
      in accordance with either the actuarial method or the United States Rule method. Explanations, equations
      and instructions for determining the annual percentage rate in accordance with the actuarial method
      are set forth in appendix J to this part. An error in disclosure of the annual percentage rate or
      finance charge shall not, in itself, be considered a violation of this part if:'
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-i
  canonical_id: reg-z-1026.22-i
  section: 12 CFR §1026.22 — Determination of annua
  description: '(i): (i) The error resulted from a corresponding error in a calculation tool used in good
    faith by the creditor; and (ii) Upon discovery of the error, the creditor promptly discontinues use
    of that calculation tool for disclosure purposes and notifies the Bureau in writing of the error in
    the calculation…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: '(i) The error resulted from a corresponding error in a calculation tool used in
      good faith by the creditor; and (ii) Upon discovery of the error, the creditor promptly discontinues
      use of that calculation tool for disclosure purposes and notifies the Bureau in writing of the error
      in the calculation tool. (2) As a general rule , the annual percentage rate shall be considered
      accurate if it is not more than 1/8 of 1 percentage point above or below the annual percentage rate
      determined in accordance with paragraph (a)(1) of this section. (3) In an irregular transaction,
      the annual percentage rate shall be considered accurate if it is not more than 1/4 of 1 percentage
      point above or below the annual percentage rate determined in accordance with paragraph (a)(1) of
      this section. For purposes of this paragraph (a)(3), an irregular transaction is one that includes
      one or more of the following features: multiple advances, irregular payment periods, or irregular
      payment amounts (other than an irregular first period or an irregular first or final payment). (4)
      Mortgage loans. If the annual percentage rate disclosed in a transaction secured by real property
      or a dwelling varies from the actual rate determined in accordance with paragraph (a)(1) of this
      section, in addition to the tolerances applicable under paragraphs (a)(2) and (3) of this section,
      the disclosed annual percentage rate shall also be considered accurate if:'
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-i
  canonical_id: reg-z-1026.22-i
  section: 12 CFR §1026.22 — Determination of annua
  description: '(i): (i) The rate results from the disclosed finance charge; and (ii) (A) The disclosed
    finance charge would be considered accurate under § 1026.18(d)(1) or § 1026.38(o)(2) , as applicable;
    or (B) For purposes of rescission, if the disclosed finance charge would be considered accurate under
    § 1026.23(g) …'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: '(i) The rate results from the disclosed finance charge; and (ii) (A) The disclosed
      finance charge would be considered accurate under § 1026.18(d)(1) or § 1026.38(o)(2) , as applicable;
      or (B) For purposes of rescission, if the disclosed finance charge would be considered accurate
      under § 1026.23(g) or (h), whichever applies. (5) Additional tolerance for mortgage loans. In a
      transaction secured by real property or a dwelling , in addition to the tolerances applicable under
      paragraphs (a)(2) and (3) of this section, if the disclosed finance charge is calculated incorrectly
      but is considered accurate under § 1026.18(d)(1) or § 1026.38(o)(2) , as applicable, or § 1026.23(g)
      or (h), the disclosed annual percentage rate shall be considered accurate:'
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-i
  canonical_id: reg-z-1026.22-i
  section: 12 CFR §1026.22 — Determination of annua
  description: '(i): (i) If the disclosed finance charge is understated, and the disclosed annual percentage
    rate is also understated but it is closer to the actual annual percentage rate than the rate that
    would be considered accurate under paragraph (a)(4) of this section; (ii) If the disclosed finance
    charge is overs…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: (i) If the disclosed finance charge is understated, and the disclosed annual percentage
      rate is also understated but it is closer to the actual annual percentage rate than the rate that
      would be considered accurate under paragraph (a)(4) of this section; (ii) If the disclosed finance
      charge is overstated, and the disclosed annual percentage rate is also overstated but it is closer
      to the actual annual percentage rate than the rate that would be considered accurate under paragraph
      (a)(4) of this section.
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-b
  canonical_id: reg-z-1026.22-b
  section: 12 CFR §1026.22 — Determination of annua
  description: '(b): (b) Computation tools. (1) The Regulation Z Annual Percentage Rate Tables produced
    by the Bureau may be used to determine the annual percentage rate, and any rate determined from those
    tables in accordance with the accompanying instructions complies with the requirements of this section.
    Volume I of…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: '(b) Computation tools. (1) The Regulation Z Annual Percentage Rate Tables produced
      by the Bureau may be used to determine the annual percentage rate, and any rate determined from
      those tables in accordance with the accompanying instructions complies with the requirements of
      this section. Volume I of the tables applies to single advance transactions involving up to 480
      monthly payments or 104 weekly payments. It may be used for regular transactions and for transactions
      with any of the following irregularities: an irregular first period, an irregular first payment,
      and an irregular final payment. Volume II of the tables applies to transactions involving multiple
      advances and any type of payment or period irregularity. (2) Creditors may use any other computation
      tool in determining the annual percentage rate if the rate so determined equals the rate determined
      in accordance with appendix J to this part, within the degree of accuracy set forth in paragraph
      (a) of this section.'
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-c
  canonical_id: reg-z-1026.22-c
  section: 12 CFR §1026.22 — Determination of annua
  description: '(c): (c) Single add-on rate transactions. If a single add-on rate is applied to all transactions
    with maturities up to 60 months and if all payments are equal in amount and period, a single annual
    percentage rate may be disclosed for all those transactions, so long as it is the highest annual percentage
    …'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: (c) Single add-on rate transactions. If a single add-on rate is applied to all transactions
      with maturities up to 60 months and if all payments are equal in amount and period, a single annual
      percentage rate may be disclosed for all those transactions, so long as it is the highest annual
      percentage rate for any such transaction.
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
- id: reg-z-1026.22-d
  canonical_id: reg-z-1026.22-d
  section: 12 CFR §1026.22 — Determination of annua
  description: '(d): (d) Certain transactions involving ranges of balances. For purposes of disclosing
    the annual percentage rate referred to in § 1026.17(g)(4) (Mail or telephone orders—delay in disclosures)
    and (h) (Series of sales—delay in disclosures), if the same finance charge is imposed on all balances
    within a s…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 12 CFR §1026.22(a)(1)
    source_class: cfpb-regulation
    source_url: https://www.ecfr.gov/current/title-12/chapter-X/part-1026/section-1026.22
    snapshot_id: 8dbb8202930fa433
    fetched_at: '2026-05-24T19:34:07Z'
    content_hash: sha256:b0badcfd6d6d83ce5c98628dbf335e5993e0a60ccd8658ef20c8b29d4cd27934
    paragraph_quote: (d) Certain transactions involving ranges of balances. For purposes of disclosing
      the annual percentage rate referred to in § 1026.17(g)(4) (Mail or telephone orders—delay in disclosures)
      and (h) (Series of sales—delay in disclosures), if the same finance charge is imposed on all balances
      within a specified range of balances, the annual percentage rate computed for the median balance
      may be disclosed for all the balances. However, if the annual percentage rate computed for the median
      balance understates the annual percentage rate computed for the lowest balance by more than 8 percent
      of the latter rate, the annual percentage rate shall be computed on whatever lower balance will
      produce an annual percentage rate that does not result in an understatement of more than 8 percent
      of the rate determined on the lowest balance. [ 76 FR 79772 , Dec. 22, 2011, as amended at 78 FR
      80112 , Dec. 31, 2013; 80 FR 80229 , Dec. 24, 2015] CFR Toolbox Law about... Articles from Wex Table
      of Popular Names Parallel Table of Authorities Accessibility About LII Contact us Advertise here
      Help Terms of use Privacy
    drafter_attestation: Verbatim subsection of 12 CFR § from Cornell LII snapshot 8dbb8202930fa433; body
      isolated between nav and notes; substring-verified.
  judgment: false
