I have noted our system parameters are set to charge a fee if the AVERAGE balance falls below a set $ amount. The disclosure on the other hand says a fee will be charged if the BALANCE falls below $xxx any day during the cycle. This is okay if both the average balance AND the daily balances are below the $ amount. I had one account in my sample where the daily balance was below the min but the average balance for the cycle was above it. The account was NOT charged a service fee. I believe charging on AVERAGE balance (the way the system is set up) does not harm the customer but I would need to do a lot more testing to be sure.

[/i]Side Note: The disclosure prior to the current one (from 2012) DID say AVERAGE balance.[i]

Is redisclosure necessary:
1. if we decide that it should be AVERAGE balance like the system has. (I don't believe so because there is no harm to the customer???)
or
2. if we decide that it should be BALANCE like the current disclosure has (I would say yes, and we can't change the system until the 30 day change in terms period has ended???)

Regardless of whether or not there is harm to the consumer, you are required to disclose the account accurately.

1030.3(b) General. The disclosures shall reflect the terms of the legal obligation of the account agreement between the consumer and the depository institution.

Yes, I realize that. What I meant was is a "change in terms" required?

In other words, if we go with what the system currently has (and what our previous disclosure said), can we just send out a new disclosure? Would we need an explanation of the change?

If we have to change our system to what the disclosure says, then we would need to do a 30 day change in terms notice and can just use a statement message?

You have two sets of customers.

Customers pre-2012 are disclosed as the system works.

Customer post-2012 are disclosed differently than the system works.

You are going to have to determine what you are going to do before you determine who you need to notify and when.