I was recently asked the following question:
Can we make an offer to break the term of a CD (ie. 5-10 year maturity CD at 5.00%) and extend them another 3 years past the current date of switch or maturity, essentially lowering their current rate now to extend to a (supposed) higher rate once they come due?
I understand that Reg DD does not prohibit a change prior to maturity and that 230.5(a) applies if the change becomes effective prior to maturity. However, it feels as if this could be a UDAAP issue. Granted, we would not be "forcing" the change in terms, only offering it. Is there anything that would prohibit this practice? Specifically, is there something I can cite to stop it? Our state law (367.393) only refers to renewal term and rate, basically referring to auto-renewal and notification. Any info would be appreciated!