IBA Compliance Connection

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A customer had a two-year CD. At the end of the term, we provided a “prematurity notice” and a grace period for renewing. The customer then requested a renewal for a four-year term. Should we redisclose the account terms by providing new TISA disclosures? Currently, we provide a change in terms notice when a customer requests a change that highlights the original issue date and amount, the last renewal date, and the new interest rate, maturity date, term and amount.

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It is not necessary to provide a full set of new TISA disclosures, because your change in terms notice highlights the new maturity date.

You are not required to provide a full set of new disclosures when a customer requests a change after you have provided a prematurity notice for the rollover CD, but you should provide a disclosure highlighting the changed maturity date. The staff commentary to Regulation DD states that if a customer requests a change of an account term after you have provided the prematurity notice, “institutions may give . . . disclosures highlighting only the new term.”

For resources related to our guidance, please see:

  • Official Interpretations, Regulation DD, 12 CFR 1030, Paragraph 5(b), Comment 5 (“In the case of a change in terms that becomes effective if a rollover time account is subsequently renewed: . . . (ii) If the change is initiated by the consumer, the account opening disclosure requirements of §1030.4(b) apply. (If the notice required by this paragraph has been provided, institutions may give new account disclosures or disclosures highlighting only the new term.”)
  • Official Interpretations, Regulation DD, 12 CFR 1030, Paragraph 5(b), Comment 6 (“Example. If a consumer receives a prematurity notice on a one-year time account and requests a rollover to a six-month account, the institution must provide either account opening disclosures including the new maturity date or, if all other terms previously disclosed in the prematurity notice remain the same, only the new maturity date.”)