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#1408596 - 06/25/10 09:18 PM Internal Deposit reclassification
Compliance Chick Offline
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Joined: Oct 2004
Posts: 192
New Orleans, La.
We are in the process of implementing the Horizon RegD-Account Reclassification Module which is designed to automate the reclassification of accounts as either transactional or non-transactional accounts enabling the bank to more accurately define reserve requirements. As part of the process we will need to develop an appropriate disclosure strategy for our customers.

Does anyone have a sample of what they have disclosed to their customers? Please PM me if needed. Thanks.
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#1408632 - 06/25/10 10:48 PM Re: Internal Deposit reclassification Compliance Chick
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Most vendors that are worth thier weight in salt that sell this program should provide you with the proper form of disclosures.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1640076 - 12/16/11 04:46 PM Re: Internal Deposit reclassification Compliance Chick
CSB98 Offline
Diamond Poster
Joined: Dec 2003
Posts: 1,337
Wisconsin
Is customer disclosure really required? It's really a back end function isn't it and the reclassification is transparent to the customer. They aren't going to see any difference in their account. My concern is that by giving this disclosure it's just going to confuse the customer even more.

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#1640107 - 12/16/11 05:38 PM Re: Internal Deposit reclassification Compliance Chick
waldensouth Offline
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waldensouth
Joined: Nov 2001
Posts: 7,983
FINALLY ABOVE the gnat line
Yes, account disclosure is required. You are changing the terms of their account even though the change will be transparent to them.

Request a Subaccount Disclosure from your forms vendor. I know WKFS has one.
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#1938499 - 07/08/14 05:37 PM Re: Internal Deposit reclassification Compliance Chick
CSB98 Offline
Diamond Poster
Joined: Dec 2003
Posts: 1,337
Wisconsin
Can someone remind what types of accounts this disclosure would be applicable to?

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#1938507 - 07/08/14 05:56 PM Re: Internal Deposit reclassification Compliance Chick
osucpa Offline
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Joined: May 2011
Posts: 1,406
I do not think a customer disclosure is required. It is a reclassification on the bank's part. It does not affect the customer. Bank's have been performing this function for the last 10 years.

Last edited by osucpa; 07/08/14 05:57 PM.
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#1938815 - 07/09/14 01:38 PM Re: Internal Deposit reclassification Compliance Chick
GoGreen Offline
Gold Star
Joined: Dec 2007
Posts: 288
PA
I agree if you have a clause in deposit account agreement that you will notify customers of any changes to this agreement then you do need to disclosure a change to the customer.

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#1938960 - 07/09/14 05:02 PM Re: Internal Deposit reclassification Compliance Chick
ckme Offline
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ckme
Joined: Sep 2002
Posts: 255
We provided this disclosure on statements and added similiar to our account terms and conditions:

Effective immediately, the Bank may make a change in your checking account that will not affect your available balance, interest earnings, FDIC insurance, or bank statement. The Bank will create a Checking sub account and a Savings sub account. The Bank may periodically transfer funds between these two sub accounts. If your Account is interest bearing, your interest calculation will remain the same. Otherwise, the savings sub accounts will be non-interest bearing. The Savings sub account will be governed by the rules governing our other Savings accounts. This change will allow the Bank to reduce the amount of funds held at the Federal Reserve Bank and will provide more funds to the Bank for lending and investing purposes.


It did stir up quite a few customer calls

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#1946506 - 07/28/14 05:46 PM Re: Internal Deposit reclassification ckme
Margarita Offline
Member
Joined: Oct 2005
Posts: 74
Wisconsin
We are in the process of changing our core system. Our current system allows us to change the account type from a savings account to a checking transactional account. We mail the client the final letter (we do the 3 letter process) and a new TISA for the new account type & a Reg CC disclosure. With the new vendor, they will only change the "FR2900 indicator field" on the savings account that will reclassify it as a transaction account for reserve requirements, but the account type will still be a savings account. Does this mean then we must stop paying interest also on the savings account? Also they feel that since it is done "in the back room" and won't be noticed by the client because the account type will not change, that no notice to the client is required.

I disagree. We are changing the terms of the original account agreement in my opinion. Also, what about Reg CC? When it was an actual savings account, Reg CC did not apply. Now that it will be a transactional account, will it now be covered by Reg CC since it is transactional? I see this as a nightmare to keep straight.

Any opinions would be greatly appreciated!

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