Topic: Consumer Deposit Account Act
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Under Illinois law, do wire transfer fees and fees to order foreign currency need to be disclosed on new account opening documents? We have been told that Regulation E and Regulation DD do not require such a disclosure but are wondering if there is an Illinois requirement. Also, if we change one of these fees, do we have to give customers thirty days’ advance notice?
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No, we do not believe that Illinois law requires banks to disclose fees for wire transfers and foreign currency orders at account opening, provided that these services are offered to both account and nonaccount holders. Also, we do not believe that you are required to give customers thirty days’ advance notice if you increase one…
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We have a consumer account that has repeatedly been overdrawn. The customer does not seem interested in covering the overdraft. What notice must we provide to close this account? Our account disclosures do not specify a timeframe for closing an account.
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In general, we recommend providing at least thirty days’ notice before closing an account if neither your account disclosures nor account agreement specifies a timeframe to provide notice before closing an account. Given the risk of further overdrafts in this situation, your bank may wish to stem its losses by freezing the account until the…
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We are an Illinois state-chartered bank and have been asked if we can provide services to customers who are residents of a nursing home. The Illinois Banking Act indicates that we can provide such services on a “limited basis.” Is this a limitation on the type of services we can provide or how often we can provide the services? Are there any other restrictions that we need to consider if we were to handle deposit accounts and check cashing at a nursing home or elder care facility?
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Section 44.1 of the Illinois Banking Act permits state-chartered banks to “conduct a banking business at the location” of a nursing home or retirement home without that location being deemed a branch. In our view, the primary significance of this decades-old language is that it clarified that banks could provide such services without running up…
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Our account agreement permits us to close an account “at any time upon reasonable notice” to the customer and tender of the account balance. We also may close accounts immediately in cases of suspected fraud. We would like to close one particular account due to a number of issues (excessive overdrafts, tax levies, etc.), but not due to suspected fraud. In that case, what is the definition of reasonable notice to the customer?
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We recommend providing at least thirty days’ notice before closing an account when your agreement requires “reasonable notice” without specifying a timeframe, unless you suspect fraudulent activity or otherwise are expressly permitted to do so with less or no notice by your account agreement. We are not aware of any laws or court decisions that…
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We charge a paper statement fee on deposit accounts that are not enrolled in e-statements, except for accounts held by individuals over age 65. Does the Illinois Consumer Deposit Account Act prohibit us from charging this fee, or can we start charging it to customers over age 65?
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We do not recommend charging a paper statement fee on Basic Checking Accounts (accounts for individuals over age 65 required by the Consumer Deposit Account Act). The Consumer Deposit Account Act limits minimum balance requirements and activity fees for Basic Checking Accounts without expressly prohibiting other fees, such as paper statement fees. However, charging a…
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We are converting from a state bank to a national bank. Do we still need to include a “starting date” on the face of our checks now that we are a national bank?
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No you are not required to include the date a deposit account was opened (“starting date”) on each check. The Illinois Consumer Deposit Account Act and the Check Printer and Check Number Act previously required banks to clearly display the month and year in which a deposit account was opened on the face of each…
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Is a federally-chartered savings association required to offer a basic checking account to senior citizens? If yes, can we charge a monthly maintenance fee?
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No, a federal savings association is not required to provide the basic checking account mandated by the Illinois Consumer Deposit Account Act. Your institution may rely on a former Office of Thrift Supervision (OTS) opinion letter concluding that federal law preempts the Illinois law requiring basic checking accounts for seniors. However, this answer would change…
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Our examiners cited us under the Illinois Consumer Deposit Account Act, because we charge a fee on our Basic Checking Accounts if they fall below a certain minimum deposit and don’t have any direct deposits.
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We believe that the Consumer Deposit Account Act requires you to provide a Basic Checking Account to seniors (persons over the age of 65) without charging fees based on a minimum balance requirement. The law states that Basic Checking Accounts “shall be established” with a $100 minimum initial deposit or a direct deposit agreement, and…
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Is there a regulation that says banks must offer seniors a no cost checking account due to automatic deposits of their social security checks?
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The Consumer Deposit Account Act requires financial institutions to offer “basic checking accounts” to any person 65 years of age or older that request such an account. 205 ILCS 605/4. You may not charge activity fees on these accounts for the first ten checks each month, though you may charge your customary stop payment and…
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We are considering imposing a fee when mailing paper statements on our senior accounts. Is that a good idea, considering that many seniors don’t have computer access?
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We agree that the bank should consider UDAAP concerns in analyzing the paper statement fee for senior citizen deposit accounts. Although we are not aware of any laws or regulations that would prohibit such a fee, as we discuss below, there is a chance that an examiner could see such a fee as unfair or…