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#1872231 - 11/18/13 08:36 PM Wrong interest rate used.
srobi Offline
New Poster
Joined: Jun 2008
Posts: 15
The TIS disclosure states that the interest rate on the savings account is determined by meeting certain criteria on the checking account. When criteria is not met, the rate is the same as the regular savings rate. If the wrong base rate (which is lower) is used to calculate interest for the non-conforming accounts, must we pay the customer the difference? The difference in the disclosed rate and the actual rate paid is .04%. The regular savings account customers were paid more than the other savings account customers. Does the allowable variance apply to disclosures?
thanks in advance for your response

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Operations Compliance
#1872838 - 11/20/13 05:14 PM Re: Wrong interest rate used. srobi
BurntSienna Offline
Diamond Poster
Joined: Aug 2006
Posts: 2,407
Midwest
I'm trying to understand the question.

Example: TIS says Super Savings account will earn 0.08% if it has a minimum $1,000 balance every day of the cycle. If it doesn't meet the criteria, it earns 0.06%, the same as a Regular Savings account.

Account 1234 dips below $1,000 (has a $900 balance) so you should pay them 0.06% for that quarter, per your TIS.

But you actually paid them 0.04%? If so, then I would say yes, you need to go back and recalculate the interest and pay them what you said you would pay them in your disclosures, 0.06%.

If I have misunderstood the question, please clarify.

I do not know what you mean by "Does the allowable variance apply to disclosures?"
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"Gratitude makes sense of our past, brings peace for today, and creates a vision for tomorrow." - Melody Beattie

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#1873254 - 11/21/13 06:37 PM Re: Wrong interest rate used. srobi
srobi Offline
New Poster
Joined: Jun 2008
Posts: 15
Sorry the question was unclear. I think you have answered my question about paying the difference.

Regarding the allowable variance question, I'm referencing the following:

Reg DD- Rounding and accuracy rules for rates and yields (230.3 (f))
"Accuracy- The annual percentage yield (and the annual percentage yield earned) will be considered accurate if it is not more than one-twentieth of one percentage point (.05 percent) above or below the annual percentage yield (and the annual percentage yield earned) that are calculated in accordance with Appendix A of Regulation DD".

thank you for your help

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