We found some passbooks where the customer set up recurring debits from a third party. We are reaching out to these customers to stop this practice. We will be sending a statement to account for these transactions as this type of error triggers a statement. We are using our Statement Savings account format, and it will be a mirror image of this EXCEPT we want to not indicate the earned APY. As this is a one type "correction" to bring the customer up to date with a notice (even though they may have come in to get the passbook updated), how big a problem/regulatory violation will this be if we do not include the APY info? All other info will be included.
Thank you.

The fact that you identified a operational/compliance error will be noted, and it should also be noted by the examiner that you've corrected it on a forward basis and provided the affected consumers with the Regulation E statements required. That triggers the APY earned disclosure, which will be a technical violation under Regulation DD. It should be a low-risk problem as long as you've plugged the hole that created the problem.

As to plugging the hole, I assume you will have some sort of process to detect and deny future third-party ACH debits from the accounts.

John, thanks for the response. As my brain is clouded, if we omit the APY but include everything else, will we be cited for knowingly omitting a piece of the disclosure? We have a process to detect and deny future transactions.

Periodic statement requirements on interest bearing accounts require the APYE, the last I knew!

Going back to the OP, you can get those statements out to plug the information gap, but you can't really unring the non-compliance bell, even if you're somehow able to include an APYE on them.

I believe that, although there is some customer relations benefit to continuing to offer these antediluvian accounts, they pose increasing risk of operational and compliance challenges as the rest of the banking environment continues its adaptation to current technology and customer preference.