IBA Compliance Connection

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On our consumer money market accounts, we pay a higher interest rate and waive service charges when the balance reaches a certain threshold. We would like to add additional thresholds paying higher interest rates at higher dollar amounts. Do we need to provide advance notice of this change?

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No, we do not believe that advance notice is required. This change would not adversely affect your customers, who would continue to receive the same interest rates they receive today under your current practice, or higher rates than they receive today. 

We do recommend providing some form of notice to ensure that all of your customers are aware that they can deposit additional funds to reach the new tiers. 

For resources related to our guidance, please see:

  • Regulation DD, 12 CFR 1030.5(a)(1) (“A depository institution shall give advance notice to affected consumers of any change in a term . . . if the change may reduce the annual percentage yield or adversely affect the consumer.”