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#1862195 - 10/17/13 02:35 PM Changing terms of a CD
Confused in Compliance Offline
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Posts: 228
If we decide to change the grace period for a CD that is coming up on maturity, would we need to provide a new CD contract/certificate with the new grace period for the next term or would an advance notice to the customers suffice?

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#1862204 - 10/17/13 02:43 PM Re: Changing terms of a CD Confused in Compliance
rlcarey Offline
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rlcarey
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Posts: 77,275
Galveston, TX
See 1030.5 Subsequent disclosures.
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#1862211 - 10/17/13 02:51 PM Re: Changing terms of a CD Confused in Compliance
Confused in Compliance Offline
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Joined: Apr 2002
Posts: 228
Yes, I understand that an advance notice will be required. My question is whether or not I have to produce a new CD Certificate with the new grace period, or will the notice suffice for the customer as a change in that particular term. I am worried that I am going to have to produce a new CD Certificate with the new grace period printed on it and that will be a much bigger project than just providing a blanket mailing of a change in terms.

What do you think?

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#1862232 - 10/17/13 03:21 PM Re: Changing terms of a CD Confused in Compliance
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,275
Galveston, TX
A "certificate" is just a piece of paper unless you are issuing negotiable CDs.

Blanket mailing? You normally can only make this change at renewal.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1862262 - 10/17/13 04:02 PM Re: Changing terms of a CD Confused in Compliance
Confused in Compliance Offline
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Joined: Apr 2002
Posts: 228
Blanket mailing to groups of customers with renewals coming up; grouped by maturity date.

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#1863753 - 10/22/13 05:41 PM Re: Changing terms of a CD Confused in Compliance
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
Be sure to test your computer system closing processes to make sure all employees are educated on any additional steps needed during your transition period. Many systems automatically calculate penalties and closing amounts based on specific CD parameters. The screens may require manual changes to accommodate your new timelines until all CDs have been renewed under the new terms and the CD parameters updated.

Another option would be to establish new CD type codes with the appropriate new parameters and convert CDs as they mature. Obviously, the renewal notices would document this change.
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