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#1566431 - 06/17/11 02:56 PM Does Reg. DD and renewing a Certificate of Deposit
LuvCompliance Offline
Member
Joined: Mar 2010
Posts: 63
Does Reg. DD require that we provide disclosures when an existing CD is renewed or is this up to each institution's practice? Thanks in advance.

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Deposits and Payments
#1566448 - 06/17/11 03:18 PM Re: Does Reg. DD and renewing a Certificate of Deposit LuvCompliance
waldensouth Offline
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waldensouth
Joined: Nov 2001
Posts: 7,981
FINALLY ABOVE the gnat line
Ours are automatically renewable so the customer receives the required maturity notices - those over 1 year receive full TISA disclosure.

Any we may have inherited from purchased banks that are not AR, are provided with a new TISA when the account comes up for renewal since the old CD no longer exists.
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#1566452 - 06/17/11 03:12 PM Re: Does Reg. DD and renewing a Certificate of Deposit LuvCompliance
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Depending on the term...the requirements are for notices (and sometimes full disclosure) BEFORE maturity. See Reg D, subsequent disclosure requirements.
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#1566490 - 06/17/11 03:39 PM Re: Does Reg. DD and renewing a Certificate of Deposit RR Joker
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
Reg DD 230.5 Subsequent Disclosures
(b) Notice before maturity for time accounts longer than one monththat renew automatically. For time accounts with a maturity longer than one month that renew automatically at maturity, institutions shall provide the disclosures described below before maturity. The disclosures shall be mailed or delivered at least 30 calendar days before maturity of the existing account. Alternatively, the disclosures may be mailed or delivered at least 20 calendar days before the end of the grace period on the existing account, provided a grace period of at least five calendar days is allowed.

(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.

(2) Maturities of one year or less but longer than one month. If the maturity is one year or less but longer than one month, the institution shall either:
(i) Provide disclosures as set forth in paragraph (b)(1) of this section; or
(ii) Disclose to the consumer:
(A) The date the existing account matures and the new maturity date if the account is renewed;
(B) The interest rate and the annual percentage yield for the new account if they are known (or that those rates have not yet been determined, the date when they will be determined, and a telephone number the consumer may call to obtain the interest rate and the annual percentage yield that will be paid for the new account); and
(C) Any difference in the terms of the new account as compared to the terms required to be disclosed under Sec. 230.4(b) of this part for the existing account.

(c) Notice before maturity for time accounts longer than one year that do not renew automatically. For time accounts with a maturity longer than one year that do not renew automatically at maturity, institutions shall disclose to consumers the maturity date and whether interest will be paid after maturity. The disclosures shall be mailed or delivered at least 10 calendar days before maturity of the existing account.
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#1696981 - 05/08/12 05:27 PM Re: Does Reg. DD and renewing a Certificate of Deposit LuvCompliance
JacksTigger Offline
Gold Star
JacksTigger
Joined: Jan 2010
Posts: 260
lost in compliance land
Tagging on...

We send out the full TISA disclosure for all CD's that have maturities over 1 year. Our TISA disclosures are specific for the customer's CD (rate, and actual maturity date).

Our actual renewal notice states what the new maturity date will be and that the rate won't be determined until later and provides a phone number to call.

So when we are sending out the TISA disclosure before renewal--should the TISA disclosure be a repeat of what the customer received when they opened the account or should it reflect what the CD will have when it auto renews?? ie. new maturity date and rate

I'm confused - please help
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#1697056 - 05/08/12 07:03 PM Re: Does Reg. DD and renewing a Certificate of Deposit LuvCompliance
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,785
Cape Cod
It should reflect the terms of the renewal CD. It need not include the interest rate and APY if that information is unknown at the time it's sent. Thus the statement on the maturity notice about the number to call for that info.

Also, don't forget that the maturity notice should include that full disclosure. It's one notice requirement, not two.

And, for the record, in case someone asks, there is no requirement to send a notice of the rate, APY, etc., once the renewal is completed.
Last edited by John Burnett; 05/08/12 07:10 PM.
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