In TN, and most other states, the payment of interest is not considered customer initiated activity. The posting of interest to the CD is bank initiated and part of the terms of the CD. TN considers the following to be activity:
"(1) Any demand, savings, or matured time deposit made with a banking organization, together with any interest or dividend thereon, excluding any charges that may lawfully be withheld, unless the owner has, within five (5) years:
(A) Increased or decreased the amount of the deposit, or presented the passbook or other similar evidence of the deposit for the crediting of interest;
(B) Corresponded in writing with the banking organization concerning the deposit; or
(C) Otherwise indicated an interest in the deposit as evidenced by a memorandum on file with the banking organization, providing such memorandum is one which is routinely kept according to customary banking practices;"
They address automatic renewals in their administrative rules: "1700-02-01-.11 ABANDONMENT OF CERTIFICATES OF DEPOSIT. Certificates of deposit which are automatically renewed at the end of a term and for which no contact has been made shall be deemed to be abandoned at the end of the term in which the statutory abandonment period has run." This means that the dormancy trigger is the first maturity date unless the customer takes one of the actions indicated above.
Last edited by tpowers4; 05/27/14 06:35 PM.
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