All of our consumer-related CDs have an auto-renewal component. However, for some of these multi-year CDs we want to change some terms come renewal time. Therefore we don't want to send the 'standard' auto-renewal notice, but rather send a notice describing the changes to the CD upon renewal.

I'm presuming this is 'okay', since we are giving them the 10-day notice we would usually give. In addition, I'm thinking of sending a letter to them much prior to the renewal notice, letting them know what's coming.

Do we need to have the customer come in and sign a new CD or can we renew the existing one with the new terms, once they've been communicated to them?

First I would send a letter 30 days ahead if the changes are negative for the consumer. Without knowing the changes you are making it would depend if you needed a new CD or not. If you have a easy way of telling which ones have the changed terms then no but it will not be easy to tell then I would have them come in and sign a new CD.

Assuming these all have maturities greater than one year, all you have to do is meet the requirements of 1030.5(b)(2). Anything more than that is either a customer service issue or driven by operational issues.

We are considering a 13 month non-renewing CD. The language in Reg DD regarding disclosure of non-renewing cds is confusing me. It states "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." We do not plan to offer renewing this account as a option - is that a problem?

It is not a problem, but you need to tell them whether or not you pay any interest on the account after maturity, i.e., the time between when the CD matures and the time they come in to redeem it.

Here are the model clauses:

(2) Non-Automatically Renewable Time Accounts

This account will not renew automatically at maturity. If you do not renew the account, your deposit will be placed in [an interest-bearing/a noninterest- bearing] account.

That language says "if they do not renew the account . . ." Since they can't renew the account is that a problem?

Thanks for your help Randy!

That means if they don't come into the bank and renew it. Whether or not you offer a 13 month CD at that time is not an issue. They can come in and renew it into your then current products.

That makes sense. Thanks so much!