We are getting ready to change our CD penalties. In doing so, can I do a blanket mailing to all existing CD accountholders disclosing the change of penalty terms upon renewal, or do I need to notify 30 days prior to the CD renewing?

The notice of the change must be included in or with the notice of impending maturity that is required under Regulation DD section 1030.5(b).

John, what if the CD does not mature for another 2 years? Let's say you change the CD penalties for early withdraw from 30 days to 90 days worth of interest. If you change the penalties now, that customer with a 2 year CD would not know about the penalty change until it was time for renewal or close to maturity. Wouldn't you have to send the notice 30 days prior to the changes taking effect regardless of maturity date?

You can't change the penalties for an existing certificate since that is written into the original contract. You can change it when at renewal or for new CDs.

Thanks Skittles