Confused in reading Reg. E versus Reg. DD. We are adding a new electronic transfer service "person to person" where you can pay anyone, no matter where they bank, through our mobile banking product. There will be a fee per transfer. Reg. E says a change in terms (involving fees)requires a 21 day prior notice but Reg. DD says a 30 day prior notice is required. Which do we go with? Is there an example of when you could go with the 21 day notice and not the 30 day?

Reg DD 1030.3(c)

Relation to Regulation E (12 CFR Part 1005). Disclosures required by and provided in accordance with the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) and its implementing Regulation E (12 CFR Part 1005) that are also required by this part may be substituted for the disclosures required by this part.

In other words, if you are providing required disclosures under Reg E, your obligations under Reg DD are waived so you can choose to go with the 21 day notice. (Note there is nothing wrong with being conservative and going with 30 days advance notice.)

Regulations aside, Do customers have to sign a contract to use this new service? If so, based on 1005.7, this would not be a change in terms. All you would need to do is provide an updated EFT Disclosure including the new transaction type and new fee in close proximity to the customer enrolling in the service, and prior to charging a fee.

Wouldn't the per transfer fee need to be added to our fee schedule and that update alone require a 30 day prior notice?

Also can our Reg. E disclosure not list fees but just refer to the fee disclosure for those that apply to electronic transfers?

No, as Brian has sliced and diced it, Regulation DD does not require a duplication of disclosures you have already made under Regulation E.

If you disclosed them only in your Regulation E disclosure, the 21 day advance notice will suffice. If you disclosed them in both disclosures you might have to sit down and explain the time frame to your reviewer.

So the fee will only be disclosed on the new Reg. E disclosure the customer gets when he signs up for the new product and the fee does not have to be added to the existing fee schedule? I thought all fees had to be on the fee schedule.

Regulation E requires the disclosure of fees. Regulation DD requires the disclosure of fees. There is no federal regulation that requires an all encompassing "fee schedule." If you have one, that's fine, but it's not required.

As Brian's post indicates, Regulation DD requirements overlapped those of Regulation E so the former was crafted in such a way that it did not require the bank to reiterate disclosures already given.

Thanks Brian & Ken for helping us better understand!

Brian -

Can you clarify your response? Would the bank be required to provide a "Full" updated EFT Disclosure with new transaction types and new fees or would an abbreviated EFT disclosure document describing only the new transaction types and new fees be sufficient?

You can provide a completely separate EFT disclosure for the new service if you wish, only providing it to those who subscribe. But if you "mainstream" this service at some point, it would be wise to roll it into your primary EFT disclosure to ensure that everyone gets it.