IBA Compliance Connection

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We have added a line to our monthly statements and transaction receipts advertising a Christmas Club account with a “3.5% APY.” If we remove the mention of the APY, would that eliminate the need to provide additional disclosures under Regulation DD?

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Yes, removing the mention of the annual percentage yield (APY) will eliminate the need to provide additional advertising disclosures related to the APY. Regulation DD requires additional disclosures to be provided with advertisements that include trigger terms such as “annual percentage yield” or “APY.” Without those trigger terms, the additional disclosures are not required.

For resources related to our guidance, please see:

  • Regulation DD, 12 CFR 1030.8(c) (“When additional disclosures are required. Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously: . . .”)
  • Official Interpretations, Regulation DD, 12 CFR 1030, Paragraph 8(c), Comment 1 (“The following are examples of information stated in advertisements that are not ‘trigger’ terms: (i) ‘One, three, and five year CDs available.’ (ii) ‘Bonus rates available.’ (iii) ‘1% over our current rates,’ so long as the rates are not determinable from the advertisement.”