Normally we don't send periodic statements on our vacation/christmas club accounts. We do have some club accounts that receive ACH deposits biweekly directly from the account holder's employer. I realize that under Reg E we are required to send monthly statements for these accounts. What if we have arrangements with other employers for making deposits to their employee's club accounts in these situations:

1. The bank debits the employer's account at our bank and credits the employees club account on a biweekly basis. Customer never sees the deposit on any statments.

2. The employer sends a lump sum check to the bank and we make deposits to numerous employee's club accounts per instructions from the employer. Again the customer never sees the deposit on any statements.

In these last two examples, are we not required to send periodic statements because no EFT is involved? Or must we provide a statement because the transfer into the club account doesn't come from another account at our bank that the customer receives periodic statements on?

Is this a dumb question or just that no one has an answer. I'd even accept opinions if there are no hard answers. Thanks in advance!

I thought we had to send statements at least quarterly, and even if not required it is a good idea. If the bank is handling the debits and credits manually vs electronically, the customer needs to be able to see the activity in order to identify any suspicious or unauthorized entries to the account.

I agree - quarterly statements are required as the accounts are receiving preauthorized transfers to the accounts. 12 CFR 205.9(c)

If transactions are occuring on the club account every 26 weeks, wouldn't we have to send monthly statements, not just quarterly.

That's also what I was thinking - how do the employees know that the deposits to their club accounts are actually being made. The employer or the bank could make a mistake and the employee wouldn't know until the club account matured after one year.

See the citation I quoted above. If the account are subject to only preauthorized transactions going into the account, the minimum requirement is quarterly statements.

We can go quarterly for accounts where the only transaction is the payment of interest, can't we? I don't see the monthly payment of interest as an EFT.

Payment of interest is not an EFT.

It may also be how you approach your clubs as "time deposits" or "savings deposits" may affect your statement issuance.