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#2099587 - 09/20/16 10:35 PM CD Withdrawal Penalty
Betty Banker Offline
Joined: Sep 2015
Posts: 54
A customer cashed out a CD after being opened only 7 days. Reg D requires that all time accounts impose an early withdrawal penalty that equals the loss of seven days' interest on funds withdrawn within the first 6 days. We disclosed an early withdrawal penalty of 6 months and charged this penalty amount at time of withdraw. Should we have only charged our customer a seven days interest penalty?

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#2099589 - 09/20/16 10:53 PM Re: CD Withdrawal Penalty Betty Banker
rlcarey Offline
10K Club
Joined: Jul 2001
Posts: 79,893
Galveston, TX
No. Your contract told them the penalty and it exceeded the regulatory minimum requirement.
The opinions expressed here should not be construed to be those of my employer:

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#2099595 - 09/21/16 10:34 AM Re: CD Withdrawal Penalty Betty Banker
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Reg D establishes a minimum penalty. Your TISA disclosure reflects the penalty you actually impose. It can be more. It just cannot be less.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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