Thread Options
#2039340 - 09/18/15 02:59 PM Changing Early Withdrawal Penalty
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
What is the time frame and in what matter must we notify the customer base if we plan to change the withdrawal penalty on CDs are IRAs?

Return to Top
Deposits and Payments
#2039344 - 09/18/15 03:17 PM Re: Changing Early Withdrawal Penalty mdog76
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,963
TN
When their current CD matures and it rolls into the new plan.
_________________________
My Opinions Only

Return to Top
#2039353 - 09/18/15 03:41 PM Re: Changing Early Withdrawal Penalty mdog76
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
So we would be fine in putting the penalty language on the renewal notice?

Return to Top
#2039374 - 09/18/15 04:12 PM Re: Changing Early Withdrawal Penalty mdog76
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,643
Galveston, TX
Refer to 1030.5
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2039395 - 09/18/15 04:45 PM Re: Changing Early Withdrawal Penalty mdog76
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
If I am understanding 1030.5 correctly, it says that any change in terms must be given out at least 30 days before hand if it meets 1030.4(b). 1030.4(b) states that early withdrawal penalty is a disclosure that would meet the 30 day requirement, again if I am reading this correctly. Mr. Carey, we found an ask the guru question that was answered in 2010 that said an increase in withdrawal penalty can be noted on the renewal notice. Our notices go out 10 days before hand. Would this be sufficient?

Return to Top
#2039403 - 09/18/15 04:50 PM Re: Changing Early Withdrawal Penalty mdog76
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,643
Galveston, TX
Keep reading that paragraph:

Alternatively, the disclosures may be mailed or delivered at least 20 calendar days before the end of the grace period on the existing account, provided a grace period of at least five calendar days is allowed.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2039409 - 09/18/15 04:54 PM Re: Changing Early Withdrawal Penalty mdog76
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
Ok its coming together now. So it sounds like our period of 10 days would be sufficient on existing accounts since the grace period is longer than 5 days.

Return to Top
#2039410 - 09/18/15 04:56 PM Re: Changing Early Withdrawal Penalty mdog76
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,643
Galveston, TX
If you deliver 10 days before their has to be a 10 days grace period. The pre-maturity delivery plus the grace period has to equal at least 20 calendar days.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2039432 - 09/18/15 05:52 PM Re: Changing Early Withdrawal Penalty mdog76
el guapo Offline
Gold Star
el guapo
Joined: Jul 2004
Posts: 345
I'm going to nitpick for a second and point out to the OP that these accounts being IRAs doesn't factor in to your disclosure requirements. Just focus on the product, which is a CD.

Return to Top
#2039509 - 09/18/15 07:58 PM Re: Changing Early Withdrawal Penalty el guapo
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Ditto
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top

Moderator:  John Burnett