I have a question I would really appreciate help with. When a customer has exceeded the six withdrawals on their money market account and we send a letter telling them their account will be converted to an interest bearing checking account, are their any specific disclosures that need to be in that letter?

No disclosure is required, but we do note that it is a bank regulation to stay under the 6 per month.

Not in the letter necessarily, but you have to provide appropriate disclosures relative to the new account such as the TISA disclosure for a consumer account.

And it can be an interest bearing checking right?
Thanks so much!

If they are eligible to hold a NOW account, yes.

When they exceed their limit more than 3 times in a 12 month period, we change the account to a non-interest bearing account. (We send a letter each of the 2 times before.) When we actually change the account type, we send a letter notifying the customer of the change. Are we also required to send new account disclosures?

If you are in fact opening a new account for them, then yes, you should send all applicable disclosures.

I've got one coming up that I'm going to close the account and transfer the funds into an existing DDA account, therefore I won't have to send new disclosures.

We don't actually open a new account, we leave everything like it is - Account #, history, etc. & just change the type on the computer. Does that qualify as opening a new account?

My take on it would be, yes, it is a new account and so the appropriate disclosures particular to the type of account (e.g., account agreement) should be sent.

Thank you so much. I've been Compliance Officer for 2 months now & all my banking experience has been in loans. I'm trying to learn deposits. That's what I thought, but we've not done that in the past.

Our account disclosures state that their accont when it has exceeded the Reg D limits will be transferred to a non-interest bearing account. Our DP now has the abiltiy to "turn the interest off' for accounts like this.

I say we still close and transfer per our account agreement, but ops is wanting to just turn the interest off.

If we were to start the new process, wouldn't this require a change in terms be sent out, or is this even possbile under Reg D. I don't see where it is permissble under D.

I'd love to know the answer to that one too, as one of our customers also just wants us to 'turn off the interest'. I agree though, that it would seem to require a new account agreement since the original does indicate the interest. And I'm just concerned that we've have to document the [censored] out of the account so someone does not go and turn the interest back on.