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#2099587 - 09/20/16 10:35 PM CD Withdrawal Penalty
Betty Banker Offline
Member
Joined: Sep 2015
Posts: 56
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that all time accounts impose an early withdrawal penalty that equals the loss of seven days' interest on funds withdrawn within the first 6 days.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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Deposits and Payments
#2099589 - 09/20/16 10:53 PM Re: CD Withdrawal Penalty Betty Banker
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,396
Galveston, TX
No. Your contract told them the penalty and it exceeded the regulatory minimum requirement.
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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.
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