There have been a couple of credit unions and online banks advertising CDs with no early withdrawal penalties...no mention at all that it's no early withdrawal penalty only if it remains on deposit at least 6 days. These ads specifically state, "NO early withdrawal penalty!" Even the fine print states that. How can this be compliant? I've got staff asking why we can't also do this.

204.2(c)(1)(i)

(c)(1) Time deposit means:

(i) A deposit that the depositor does not have a right and is not permitted to make withdrawals from within six days after the date of deposit unless the deposit is subject to an early withdrawal penalty of at least seven days' simple interest on amounts withdrawn within the first six days after deposit.1 A time deposit from which partial early withdrawals are permitted must impose additional early withdrawal penalties of at least seven days' simple interest on amounts withdrawn within six days after each partial withdrawal. If such additional early withdrawal penalties are not imposed, the account ceases to be a time deposit. The account may become a savings deposit if it meets the requirements for a saving deposit; otherwise it becomes a transaction account.

Because maybe they are not booking them as time deposits?

Go open one, get the agreement, then withdrawal the next day.

If they won't let you, provide the add and the institution's refusal to the CFPB and their primary regulator.
If they do let you, provide the fact that they're allowing the w/d within the 6 days to their primary regulator.

Why would you do that? You have no idea whether the account is required to have an early withdrawal penalty. You can call an account anything you want to. You can call an account a certificate of deposit and booked them as demand deposits, in which case there would be no such 7-day penalty.

Why would I do that? To let the regulators investigate.

When people are looking for places to park their funds, and see ads for CDs or certificates of deposit, there's no way for them to know how the financial institution will classify the account for Call Report and/or Reg D purposes. But if there is truly no early WD penalty regardless of when an early WD takes place, it won't be correctly classed as a time deposit.