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#2171598 - 04/03/18 06:38 PM Advertising Savings Acct Tied to index
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,115
The Great White North
Hello all, rolling out a new product that I have had zero experience with before. It is a high yield savings account that is tied to an index less a margin. So, for instance, the tier for over $500,000 is tied to an index of 1.75% less .15 making the rate 1.60%. Sooo for the advertisement, we would disclose the tier, do we have to go into detail regarding the index less the margin?
Also, is there any negative implications with the phrasing: No strings attached or protect your money from volatility?
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#2171613 - 04/03/18 07:07 PM Re: Advertising Savings Acct Tied to index Bec
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,907
Galveston, TX
There is nothing in DD that requires you to reference an index in an advertisement other than a statement that the rate may change after the account is opened. But not doing so basically defeats the purpose of the account, does it not? Escpecially if they think you might drop the rate to .05% the day after the account opened? You do have to disclose all tiers and if only the top one is indexed, then you have some UDAAP issues to be concerned with.
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#2171621 - 04/03/18 07:25 PM Re: Advertising Savings Acct Tied to index Bec
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,115
The Great White North
Oh no, all tiers over $25,000 are tied to an index. $0 to $24,999.99 is not indexed. So are you saying that if it were you, you would include the index and the margin in your disclosure language?
Also, would there be any problems with having "no strings attached" and "protect your money from volatility" on the ad. The "no strings attached" is less problematic for me in that we are not requiring any hoops to be jumped through to get this account, other than having the $25,000 to earn the higher rates. But the fact that the rate is tied to an index and that, in itself could be seen as volatile has me worried about the second statement.
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