Topic: Truth in Savings Act (TISA)
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Our bank purchased another bank, and we are consolidating certain checking, savings and money market accounts. We are considering putting all of the checking accounts into two different types of checking accounts that we currently offer. We would provide new disclosures to all affected customers. Would we also need new signature cards for these accounts?
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We are not aware of any law or regulation that would require you to obtain a new signature card when a customer changes from one type of deposit account to another. However, if the account terms are being changed, we believe customers should sign new signature cards and other account agreements to memorialize their acceptance…
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Do Health Savings Accounts (HSAs) require monthly interest payments? We are considering paying interest on these accounts on a quarterly or semi-annual basis.
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We are not aware of a requirement to make HSA interest payments at any particular frequency. The IRS’ form HSA agreements do not specify that interest be paid monthly or at all. Additionally, Regulation DD does not impose a requirement to pay interest “at any particular frequency,” and the official commentary to Regulation DD provides…
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We are a state bank and are creating a pandemic disaster recovery guide for our retail department. Is it mandatory for us to make safe deposit box entry available, and must we provide mailed ten-day certificate of deposit (CD) renewal notices? Are there any guidelines for reducing our typical services to a minimum?
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Generally, your obligations to your safe deposit box customers will be dictated by the terms of your safe deposit box rental agreements, and Regulation DD dictates the disclosures you must provide to consumers with CD accounts. However, in the event of a viral pandemic, your bank’s ability to provide certain services or to comply with…
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Can we charge customers (or their authorized representatives) our standard research fee when they request copies of statements or other documents for the purpose of determining Medicaid eligibility? We disclose the research fee in our Truth in Savings Act (TISA) disclosures.
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Yes, we believe you may charge customers or their authorized representatives for research fees related to requests for documents used to determine customers’ Medicaid eligibility — provided such fees are permitted by the terms of your account agreement. We are not aware of any prohibition against charging such fees, and the Illinois Banking Act provides…
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If we raise our wire transfer fees, are we required to send a new fee disclosure to all customers thirty days in advance of the change? The wire transfer fees are included on the fee schedule we give to customers at account opening.
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No, you are not required to disclose an increase in your wire transfer fees thirty days in advance of the change — unless your account agreement requires such notice. For consumer accounts, Regulation DD generally requires at least thirty days’ advance notice of a change in term that might adversely affect the consumer. However, this…
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We would like to advertise certain deposit account products (such as CDs and rewards checking accounts) on the radio. What information about such accounts must be disclosed in a radio ad, and what information can be omitted?
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When an advertisement for a deposit account states a rate of return, it must state the rate as an “Annual Percentage Yield” – using that term. However, the abbreviation “APY” also may be used in the advertisement, provided “Annual Percentage Yield” also is stated at least once in the ad. The advertisement may not state…
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Our bank offers 30- and 90-day variable rate CDs that automatically renew. Our account agreement states that we may change any term of the agreement and that the interest rate is provided on the CD. On the face of the CDs, we state that the interest rate will be based on the 91-Day U.S. Treasury Rate. We want to change the account terms for all CD customers to provide that we will set the CD rate at our discretion, subject to change at any time with notice to the customer. Can we make this change by sending out thirty days’ advance written notice under Regulation DD? Under the new account terms, would we have to send out a thirty-day notice before decreasing the interest rate?
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Generally, we recommend waiting until any existing CDs renew before changing their interest rates or the methods for calculating them, rather than imposing such changes midstream. In addition, we note the following: 30-Day CDs For consumer savings accounts, Regulation DD generally requires depository institutions to provide at least thirty days’ notice of a change in…
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Are there any size requirements for the following lobby notices: CRA Notice, Annual Financial Disclosure Notice, Equal Housing Poster, HMDA Data Availability Notice, and Regulation CC Funds Availability Notice? Can these notices be displayed on an electronic board that switches between the notices? What does the term “prominently displayed” mean with respect to the Equal Housing Poster? Also, can you confirm that we are not required to disclose our rates on a rate board in our lobby?
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There are size requirements for some (but not all) of the notices listed in your questions. If there are no express size requirements, generally these notices should be sized and placed so that customers are able to see the notices and easily read their text. Each notice is addressed separately below. CRA Notice: The size…
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We would like to offer a money market product and would restrict the number of withdrawals from the account to one per month. Is this permissible? What disclosures would need to be provided?
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Yes, we believe it is permissible to limit withdrawals from a money market account to one per month. Regulation D requires accounts classified as savings accounts to be limited to six transfers and withdrawals per month or statement cycle, but it does not prohibit banks from imposing more restrictive limitations. Your bank’s Truth in Savings…
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Can we charge a fee for closing a deposit account within a certain number after days opening the account, assuming that we disclose the fee at account opening? If so, can we place a hold on all newly opened accounts for the early closing fee amount until the expiration of the time period in which we can impose the fee?
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We are not aware of any limitations on charging an account closing fee, provided that the fee is disclosed as required by Regulation DD. The Illinois Banking Act permits banks to determine appropriate deposit account fees in accordance with their prudent business judgment and safe and sound operating standards. However, we recommend caution regarding the…