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#115906 - 09/19/03 06:56 PM Reopening Savings Account
Anonymous
Unregistered

Can anyone refer me to a good article regarding letting a closed savings account (or checking account) reopen with just a deposit? I am thinking there could be different issues with this. One concern is that there could have been an updated disclosure relating to the account since it closed and the account would be reopened without the disclosures being provided. Thanks for your opinions.

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Operations Compliance
#115907 - 09/19/03 07:26 PM Re: Reopening Savings Account
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Some thoughts, in no particular ranking:


  • You are correct in your concern about reopening an account without Regulation DD disclosures. If your practice is to have the consumer forfeit any accrued but unpaid interest if an account is closed between interest crediting dates (and you disclose same), you must provide new Regulation DD disclosures if the account is reopened. (reference to OSC to §230.4(a)(1)).

  • I'd also be concerned by a literal reading of the rules from 31 CFR 103.121 (USA PATRIOT Act §326 rules a/k/a "CIP"). Once a customer closes his/her/its last account with you, they cannot be considered a customer with an open account when it comes to applying the CIP rules. You run the risk of failing to obtain current address and ID information if you allow a simple deposit to reopen the account without some intervention from a live staff member who should be prompted to obtain current information and do the verification steps necessary.

  • Depending on when this customer last got a Reg. E or Reg. CC or Privacy disclosure from you, they may have, as you hinted, outdated information.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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