what accounts are covered by reg dd

To minimize any potential confusion, the Bureau is preserving where possible past numbering systems by republishing regulations with Bureau part numbers that correspond to regulations in existence prior to the transfer of rulemaking authority. All calculations in the insert assume daily compounding. Examples include: i. No interpretations will be issued approving depository institutions' forms, statements, or calculation tools or methods. (2) Totals required. The annual percentage yield is expressed as an annualized rate, based on a 365-day year. Subsequent account. A certificate of deposit permitting one or more rate adjustments prior to maturity at the consumer's option is a variable-rate account. Relation to advertising. Opening or closing an account mid-cycle. Institutions must pay interest on the full balance in the account that meets the required minimum balance. Representing that consumers with an overdrawn account are allowed to maintain a negative balance when the terms of the account's overdraft service require consumers promptly to return the deposit account to a positive balance. (ii) Variable rates. Special rules apply to accounts with tiered and stepped interest rates, and to certain time accounts with a stated maturity greater than one year. Retail sweep programs. This commentary is the means by which the Bureau of Consumer Financial Protection issues official interpretations of Regulation DD. This account requires the distribution of interest and does not allow interest to remain in the account. The disclosures described in paragraphs (b)(1)(ii) and (iv) of this section are not required in connection with any advertisement made on an ATM screen or using a telephone response machine. #1339948 - 02/09/10 01:52 PM Re: Types of accounts covered by Reg DD ozzie: Elwood P. Dowd 10K Club Joined: Aug 2001 Posts: 21,939 Next to Harvey: From the commentary to the regulation: 2. When the maturity date falls on a holiday, and consumers must wait until the next business day to obtain the funds. In the interest of proper coordination of this overall regulatory framework, which includes numerous cross-references among some of the regulations, the Bureau is establishing the same effective date of December 30, 2011 for those rules published on or before that date and making those published thereafter (if any) effective immediately. Except as provided in paragraph (e) of this section, if a bonus is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously: (1) The annual percentage yield, using that term; (2) The time requirement to obtain the bonus; (3) The minimum balance required to obtain the bonus; (4) The minimum balance required to open the account, if it is greater than the minimum balance necessary to obtain the bonus; and. The institution must disclose separate totals for the statement period and for the calendar year-to-date. Highlighting changed terms. Public Law 111-203, 124 Stat. The details of these account definitions help us understand account transaction limitations (such as MMDA limits) and what types of customers can maintain NOW accounts. The following are examples of information stated in advertisements that are not trigger terms: i. A. 2. The institution must disclose separate totals for the statement period and for the calendar year-to-date. Nonrollover time accounts. The composite interest rate and APY are both 6.00%. If an account (or a specific account service) is free only for a limited period of timefor example, for one year following the account openingthe account (or service) may be advertised as free if the time period is also stated. Covered messages. Persons who advertise accounts. 553(d). The account involved complies with Regulation D of the Board of Governors of the Federal Reserve System (12 CFR 204.2(d)(2)); ii. 603(a), 604(a); 5 U.S.C. The Bureau is also seeking comment in response to a notice published at 76 FR 75825 (Dec. 5, 2011) concerning its efforts to identify priorities for streamlining regulations that it has inherited from other federal agencies to address provisions that are outdated, unduly burdensome, or unnecessary. 3170-0004. amended a number of consumer financial protection laws, including TISA. Institutions comply with the regulation by demonstrating that they have done the following: i. For example, institutions may advertise a NOW account as free for persons over 65 years old, even though a maintenance or activity fee is assessed on accounts held by consumers 65 or younger. ii. The institution also provides a periodic statement complying with this section for each account. (c) Notice to existing account holders. Totals for the calendar year to date. The fees do not include fees for transferring funds from another account to avoid an overdraft, or fees charged when the institution has previously agreed in writing to pay items that overdraw the account and the service is subject to Regulation Z, 12 CFR Part 1026. The annual percentage yield assumes interest will remain on deposit until maturity. ii. If a requirement such as a minimum balance applies to more than one account term (to obtain a bonus and determine the annual percentage yield, for example), institutions need not repeat the requirement for each term, as long as it is clear which terms the requirement applies to. iv. Stop-payment fees and fees associated with checks returned unpaid. A state law is also contradictory if it requires the use of the same term to represent a different amount or a different meaning than the federal law, requires the use of a term different from that required in the federal law to describe the same item, or permits a method of calculating interest on an account different from that required in the federal law. iii. Naming and describing the fee (such as $4.00 monthly service fee) will typically satisfy these requirements. 2. A response to an oral inquiry (by telephone or in person) Start Printed Page 79299about rates and yields or fees does not trigger the duty to provide account disclosures. An institution can pay interest each day on the account and still make uniform interest payments. The purpose of the act and regulation is to assist consumers in comparing deposit accounts offered by depository institutions, principally through the disclosure of fees, the annual percentage yield, the interest rate, and other account terms. The interest rate will never be [less/more] than __%; or. The consumer does not have direct access to the non-transaction subaccount that is part of the retail sweep program; and. 2. (1) If an institution offers a $1,000 two-year certificate of deposit that does not compound and that pays out interest semi-annually by check or transfer at a 6.00% interest rate, the annual percentage yield may be disclosed as 6.00%. Fees imposed to deposit, withdraw, or transfer funds, including per-check or per-transaction charges (for example, $.25 for each withdrawal, whether by check or in person). (ii) Check printing fees. The period of time the annual percentage yield will be offered, or a statement that the annual percentage yield is accurate as of a specified date. A date that is easily determinable, such as the Tuesday before the maturity date stated on this notice or as of the maturity date stated on this notice.. General. In determining if an item valued at $10 or less is a bonus, institutions must aggregate per account per calendar year items that may be given to consumers. Sample forms. De minimis rule. The disclosures required by paragraph (a)(1) of this section must be provided for the statement period and for the calendar year-to-date; (3) Format requirements. Dormant accounts. Other fees. 4. Tiered-rate accounts. Using notice-and comment procedures would delay this process and thus be contrary to the public interest. (If the notice required by this paragraph has been provided, institutions may give new account disclosures or disclosures highlighting only the new term.). Any advertisement inside the premises that can be retained by a consumer (such as a brochure or a printout from a computer) is not an indoor sign. 1. In addition, the balance may, but need not, include funds that are held by the institution to satisfy a prior obligation of the consumer (for example, to cover a hold for an ATM or debit card transaction that has been authorized but for which the bank has not settled). Discretionary penalties. Adverse changes to terms such as a lowering of the interest rate, annual percentage yield, or compounding frequency for funds remaining on deposit. Items with a de minimis value of $10 or less are not bonuses. Institutions may apply a daily rate of 1/366 or 1/365 of the interest rate for 366 days in a leap year, if the account will earn interest for February 29. 1. Variable-rate accounts with an introductory premium (or discount) rate must be calculated like a stepped-rate account. Examples. Club accounts. It the account is closed prior to the last day of the month, interest accrued but not credited will be forfeited. Can we require a police report to be filed in order to process an ATM Fraud claim where a person lost their wallet and a fraudster was able to withdraw funds from an ATM? 6. Consistent terminology. No other rate or yield (such as tax effective yield) is permitted. 4. A time account that does not automatically rollover is renewed by a consumer. Negative balances prohibited. ii. Additional information. 3201 et seq., Public Law 102-242, 105 Stat. A withdrawal will reduce earnings. If compounding occurs during the term and interest may be withdrawn prior to maturity, a statement that the annual percentage yield assumes interest remains on deposit until maturity and that a withdrawal will reduce earnings. Question 17 on this form, "Is the term "Interest Rate" used and not just "Rate"? Subject to state or other law, an institution may choose not to pay accrued interest if consumers close an account prior to the date accrued interest is credited, as long as the institution has disclosed that fact. An institution may use an additional method that is unequivocally beneficial to the consumer. Institutions must retain sufficient rate and balance information to permit the verification of interest paid on an account, including the payment of interest on the full principal balance. rendition of the daily Federal Register on FederalRegister.gov does not Nevertheless, to inform this rulemaking more fully, the Bureau performed the described analyses and consultations. The initial interest rate for your account is __%. How can financial institutions deliver better branch experiences for customers and members? Transfer services. If a consumer who is not present at the institution makes a request for account disclosures, including a request made by telephone, email, or via the institution's Web site, the institution may send the disclosures in paper form or, if the consumer agrees, may provide the disclosures electronically, such as to an email address that the consumer provides for that purpose, or on the institution's Web site, without regard to the consumer consent or other provisions of the E-Sign Act. All advertisements are subject to the rule against misleading or inaccurate advertisements, even though the disclosures applicable to various media differ. An indoor sign advertising an annual percentage yield is not misleading or inaccurate when: i. (4) Fees. 4005 et seq.) BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. As an alternative to the notice described in paragraph (c)(1) of this section, institutions may provide account disclosures to consumers. However, the bonus rules are not triggered if an item valued at $7 is offered to consumers opening a NOW account during the month of January, even though in November the institution introduces a new promotion that includes, for example, an offer to existing NOW account holders for an item valued at $8 for maintaining an average balance of $5,000 for the month. Examples of institutions promoting the payment of overdrafts. Balance that does not include additional amounts. But others, such as automated teller machine (ATM) withdrawals, are not affected. You must maintain a minimum average daily balance of $__ to obtain the disclosed annual percentage yield. Time accounts paying different rates based solely on the amount of the initial deposit are not tiered-rate accounts. The annual percentage yield earned during the statement period, using that term, calculated according to the rules in Appendix A of this part. Ten business days is a reasonable time for responding to requests for account information that consumers do not make in person, including requests made by electronic means (such as by electronic mail). Study with Quizlet and memorize flashcards containing terms like Truth in Savings Act (TISA) 1991, Coverage for Truth in Savings Act (TISA) /Reg DD, Truth in Savings Act enacted in 1991, implemented by Reg DD which was issued by the Federal Reserve Board in 1992 and became effective in 1993 and more. Institutions offering club accounts (such as a holiday or vacation club) cannot impose a minimum balance requirement for interest based on the total number or dollar amount of payments required under the club plan. It sounds like your bank offers a one-year CD product that is held in the IRA account and your Reg DD disclosures are lacking. The regulation does not require an institution to provide, nor a consumer to agree to receive, the disclosures required by 1030.4(a)(2) in electronic form. It is not at our bank. It also includes fees charged when there are insufficient funds because previously deposited funds are subject to a hold or are uncollected. 1-877-ASK-FDIC. The regulation covers everything from marketing a deposit account to disclosures when accounts are opened or changedthe entire life cycle of the account. Section 1100B(1); 12 U.S.C. The types of accounts the regulation is intended to assist consumers with include savings accounts, checking accounts, money market accounts, certificates of deposit (CDs), variable-rate. An institution transfers funds from an account to open a new account not at the consumer's request, unless the institution previously gave account disclosures and any change-in-term notices for the new account. Information about a particular transaction in an existing account. For variable-rate accounts: (A) The fact that the interest rate and annual percentage yield may change; (C) The frequency with which the interest rate may change; and. The annual percentage yield and the interest rate, using those terms, and for fixed-rate accounts the period of time the interest rate will be in effect. For accounts with a stated maturity greater than one year that do not compound interest on an annual or more frequent basis, that require interest payouts at least annually, and that disclose an APY determined in accordance with section E of Appendix A of this part, a statement that interest cannot remain on deposit and that payout of interest is mandatory. Balance is the average daily balance in the account for the period. An advertisement that states an annual percentage yield for a given type of account (such as a time account for a specified term) need not state the annual percentage yield applicable to other time accounts offered by the institution or indicate that other maturity terms are available. When fees of the same type are grouped together, the description must make clear that the dollar figure represents more than a single fee, for example, total fees for checks written this period. Examples of fees that may not be grouped together are. Regulation D doesn't affect every deposit account withdrawal, though, so don't be discouraged if you need more access to your funds. (1) Advance notice required. The form does not contain a separate disclosure of the minimum balance required to obtain the annual percentage yield; the tiered-rate disclosure provides that information. For example, institutions may note that a particular fee has been changed (also specifying the new amount) or use an accompanying letter that refers to the changed term. Deposit accounts include: Savings accounts Checking (demand deposit) accounts Money market accounts Certificates of deposit (CDs) Variable-rate accounts Accounts denominated in a foreign currency The regulation requires institutions to disclose information about: Annual percentage yield (APY) Interest rates Minimum-balance requirements v. By using inserts to a document or filling in blanks. The dollar amount of interest earned year-to-date. General service information such as a quarterly newsletter or other correspondence describing available services and products. The total dollar amount for each of these periods includes per-item fees as well as interest charges, daily or other periodic fees, or fees charged for maintaining an account in overdraft status, whether the overdraft is by check, debit card transaction, or by any other transaction type. (2) If an institution offers a $1,000 two-year certificate of deposit on which it pays a 6% interest rate, compounded daily, for the first year, and a 6.5% interest rate, compounded daily, for the next year, the total interest for two years is $133.13, and, using the general formula above, the annual percentage yield is 6.45%: APY = 100 [(1 + 133.13/1,000) (365/730) 1]. Other investments. The fee imposed will equal __ days/week[s]/month[s] of interest; or. 6. The annual percentage yield reflects only interest and does not include the value of any bonus (or other consideration worth $10 or less) that may be provided to the consumer to open, maintain, increase or renew an account. 2. Established and maintained procedures for paying interest and providing timely disclosures as required by the regulation, and. ii. For example, the institution could state that overdraft funds are not available for ATM and one-time (or everyday) debit card transactions. In addition, delaying the effective date of the interim final rule for 30 days would provide no practical benefit to regulated entities in this context and in fact could operate to their detriment. (3) Balance information. A consumer is entitled to these disclosures when opening a deposit account or at various other times as a potential or actual customer. On (date), the cost of (type of fee) will increase to $__. All Rights Reserved. (iv) Renewal policies. Start Printed Page 79301. We are located in Tennessee if state laws are a factor. Or, institutions may disclose $0 interest earned and 0% annual percentage yield earned. 3. For the third tier, the institution would pay $841.45 in interest on the low end of the third tier (a balance of $15,000.01). ii. Interest will begin to accrue no later than the business day we receive provisional credit for the deposit of noncash items (for example, checks) into your account. If the assumed maximum balance amount is $1,000,000 instead of $100,000, the institution would use $985,000 rather than $85,000 in the last calculation. For example, institutions offering an account that is free of deposit or withdrawal fees could advertise that fact, as long as the advertisement does not mislead consumers by implying that the account is free and that no other fee (a monthly service fee, for example) may be charged.

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