We have had the same problem, the need for manual intervention has caused us to change our maturity notices and print the full reg DD disclosures on the back of the notices. This way, all customers get the full disclosure for each maturity. The manual intervention just wasn't working as our volume continued to grow.

Our current procedure is designed to eliminate the manual preparation of a TISA at the time a CD renews. We have too many maturing CDs for anyone to have to generate a TISA from the system to mail. We created the generic form which can be automatically mailed by our Bookkeeping Dept with our CD maturity notice. It saves a great deal of time and helps to eliminate the errors which always seem to occur when manually preparing TISAs.

The process will be even better when we get our new notice format which will be an 8 1/2 x 11 notice. Each notice will then be customized to each account because it allows us to pull over account specific information, such as new maturity date, interest term and disposition, penalty, etc. I am excited about the opportunity to transform notices (which always seem cold and impersonal) to a personalized letter format.

We are talking about the 230.5(b)(1) requirement to provide a new account disclosure along with the pre-maturity notice for auto-renewing CDs with a term greater than 1 year.

The only elements that are required in the notice are those required in 230.4(b)that are applicable. For an auto-renewal CD there are only about 1/2 dozen that are applicable and half of them are most likely going to be the same for all your CDs, such as your balance computation method and compounding and crediting methods. When interest begins to accrue on deposits is not normally applicable unless you allow future deposits to the account and there are normally no disclosable fees. The interest rate and APY info is normally made available after the renewal via a phone number, the minimum balance would be the renewal amount, due to other contractual changes that may take place if they choose not to let it renew, the early withdrawal penalties should be standard. The new maturity date is a snap and so would be the effect of closing the account. So I guess I don't see the problem with automating the notice. Now if you think you have to provide them with a whole new depositor's contract that is going to govern the entire legal relationship between the customer and the bank for this CD, I could see where that would not be possible on a renewal notice, but that is not what Reg DD requires.

I'm trying to appreviate as much as I can to fit on our notice. The phone number, crediting frequency, maturity date and next maturity date are listed on our notice elsewhere. Could the average Joe understand this and will it fly by an examiner? Opinions??

"Call # above on maturity date for apy and rate. APY assumes int stays on deposit until mat, w/d’s reduce earnings. Int compounded annually and at mat. Penalty applied to accrued int if closed before credited. Int computed using daily balance method-applies a daily periodic rate to prin daily. Deposits not allowed. Auto renews at mat. 10 day grace after mat-no penalty. Min $500.00 to open. Early W/D penalty-7 days' int <6 days after opened or w/i 6 days of previous w/d,90 days <12 months,180 days >12 months."

I'm not an examiner, but I'd venture to guess that one might not pass with flying colors. I don't think we should assume the average Joe Consumer will understand all of those abbreviations.

(Like they understand it when we spell it out. We as the "experts" can't even all agree on some of the topics. We could spend the rest of the week discussing how to calculate APYs. HA, I crack myself up!)

I am new in the compliance department, and am also confused on the disclosure requirements for 1 year or more CD. I just discovered that my bank sends only the maturity notice with the rate and APY. They also do not give out (Bankers System)(Your Deposit Account)(Truth In Savings) Brochure at the time of opening the CD either, So I have instructed them to start, wouldn't that stuffed in the renewal envelope satisfy disclosure requirements.

What would be wrong with disclosing on 4th quarter notices?

ok, One quick question... ex. 3 year CD, do we send disclosures every year and at maturity? I am getting mixed signals from my bank. PLEASE HELP ( excuse spelling in a hurry)

For the 3-year CD that won't automatically renew, you only have to send a notice (under Reg. DD §230.5(c)) of the maturity date and whether interest will continue to be paid after maturity. This notice has to go out at least 10 days before maturity.

If the 3-year CD will automatically renew, §230.5(b) applies. The notice goes out 30 days before maturity (but if there is a grace period, 20 days before the end of the grace period). The notice has to include (on or with the notice) all of the information disclosed for a new account of the term for which the account would be renewed, plus the maturity date. If the interest rate and APY for the renewed term are unknown, the notice needs to include the date by which the rates will be known, and a telephone number the customer can call to learn the interest rate and APY.

There is no need for an annual notice under Regulation DD. The only annual notice for a 3-year CD is the 1099-INT.

We hired an outside firm to audit us prior to OCC coming in a few months. They told us we need to send disclosures to all CD's >1 year yearly. It does not matter if they mature roll over or have not matured yet. Is this right? I am reading that we only have to send disc. before maturity only. color me so lost.....

As has been oft-repeated in this forum, don't believe everything you hear. Corollary: Don't believe everything a consultant tells you.

Regulation DD does not require annual disclosures on time accounts over one year. If a consultant said otherwise, I would challenge him/her to "show me the rule."

[All of the following assumes you don't have some obscure state law or regulation that makes you send an annual disclosure. I am not aware of any such rule, but stranger state rules exist, so check on it first.]

IMNSHO, this person led you astray. But you're really not lost, Finch. You're just on the wrong path. Read the street signs in Regulation DD, §230.5(b) and you'll quickly find your way home.

Thank You for all of the Help... By George I think I got it...