I always interpreted that if the CD is automatically renewable, with a term greater than one year, we needed to dislose the full TIS disclosure along with the maturity notice.

I have an officer who is stating that no other terms are changing other than the interest rate and APY, and that we do not need to disclose the full TIS disclosure.

Could you please shed some light on this? Thanks.

Regulation DD states the following:

(1) Maturities of longer than one year. If the maturity is longer than one year, the institution shall provide account disclosures set forth in Sec. 230.4(b) of this part for the new account, along with the date the existing account matures. If the interest rate and annual percentage yield that will be paid for the new account are unknown when disclosures are provided, the institution shall state that those rates have not yet been determined, the date when they will be determined, and a telephone number consumers may call to obtain the interest rate and the annual percentage yield that will be paid for the new account.

230.4(b) states:

b) Content of account disclosures. Account disclosures shall include the following, as applicable:
(1) Rate information--(i) Annual percentage yield and interest rate. 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.
(ii) Variable rates. For variable-rate accounts:
(A) The fact that the interest rate and annual percentage yield may change;
(B) How the interest rate is determined;
(C) The frequency with which the interest rate may change; and
(D) Any limitation on the amount the interest rate may change.

(2) Compounding and crediting--(i) Frequency. The frequency with which interest is compounded and credited.
(ii) Effect of closing an account. If consumers will forfeit interest if they close the account before accrued interest is credited, a statement that interest will not be paid in such cases.

(3) Balance information--(i) Minimum balance requirements. Any minimum balance required to:
(A) Open the account;
(B) Avoid the imposition of a fee; or
(C) Obtain the annual percentage yield disclosed.
Except for the balance to open the account, the disclosure shall state how the balance is determined for these purposes.
(ii) Balance computation method. An explanation of the balance computation method specified in Sec. 230.7 of this part used to calculate interest on the account.
(iii) When interest begins to accrue. A statement of when interest begins to accrue on noncash deposits.

(4) Fees. The amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed.

(5) Transaction limitations. Any limitations on the number or dollar amount of withdrawals or deposits.

(6) Features of time accounts. For time accounts:
(i) Time requirements. The maturity date.
(ii) Early withdrawal penalties. A statement that a penalty will or may be imposed for early withdrawal, how it is calculated, and the conditions for its assessment.
(iii) Withdrawal of interest prior to maturity. 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. For accounts that do not compound interest on an annual or more frequent basis, with a stated maturity greater than one year 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. 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.
(iv) Renewal policies. A statement of whether or not the account will renew automatically at maturity. If it will, a statement of whether or not a grace period will be provided and, if so, the length of that period must be stated. If the account will not renew automatically, a statement of whether interest will be paid after maturity if the consumer does not renew the account must be stated.

(7) Bonuses. The amount or type of any bonus, when the bonus will be provided, and any minimum balance and time requirements to obtain the bonus.


Does this help?

You are correct, see Reg DD 230.5(b)(1):

(1) Maturities of longer than one year. If the maturity is longer than one year, the institution shall provide account disclosures set forth in §230.4(b) of this part for the new account, along with the date the existing account matures. If the interest rate and annual percentage yield that will be paid for the new account are unknown when disclosures are provided, the institution shall state that those rates have not yet been determined, the date when they will be determined, and a telephone number consumers may call to obtain the interest rate and the annual percentage yield that will be paid for the new account.

Thanks for your replies. I have one officer that states the only term that is changing is the rate and the APY and that is disclosed on the maturity notice that "it has not been determined, call us after XXX". The officer is stating that the commentary to that section states that, if the change is made by the customer, or the institution, we could need to disclose the full TIS disclosure. If there is no other changes, that he claims there is no need for the full disclosure.

Please advise as to how you intepret the commentary to 230.5.

Thanks.

I interpret it to mean that if you have a CD with a maturity greater than one year then the bank msut comply with the disclosures in section 230.4(b).

You (and/or your officer) need to refer to the appropriate section of the commentary. The section that your officer is referring to pertains to time accounts with maturities less than one year.

It says it right in the cite we provided:

"If the maturity is longer than one year, the institution shall provide account disclosures set forth in §230.4(b) of this part for the new account"