Reg CC: When is an Account Considered "Open"?
by Mary Beth Guard, BOL Guru
Question: In some of the Reg CC compliance materials I have reviewed, it looks like "a bank must provide a potential customer written disclosure of its availability policy prior to opening an account and prior to accepting a deposit if the account has not yet been opened." I wonder when an account is determined to be "open". For instance, we do not take a paper application in conjunction with opening a deposit/savings accounts.
This is the approach we are presently using:
Explain to the potential customer what checking and or savings products we offer and give them opportunity to examine brochure details.
Gather information about the person(s) and input same on the bank's data base, including identification verification and verifying with a third-party database.
Determine which deposit/savings account the prospective customer has decided on.
Provide disclosures, relative to that account, and link an account of that type to the customer information on the database.
Accept a deposit to fund the account.
We have been providing disclosures before a deposit is accepted, because in our mind that was the point an account was "opened". Is that a correct assumption?
Answer: Your procedure sounds correct to me. By providing the disclosures to the customer prior to accepting a deposit, you give the prospective customer an opportunity to review them and make a decision, based upon your disclosures, about whether or not they wish to do business with you. That's the goal of the disclosures for Reg CC, DD, E and P - informed choice.
The original version appeared in the April 2003 edition of the Oklahoma Bankers Association Compliance Informer.
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