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#2195322 - 10/12/18 03:57 PM CD Interest-Changing how the interest is paid out
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
What would need to obtain from a customer that has an auto-renewal CD who would like to change their payment of interest by check to a direct deposit into another account at our institution? Is getting an AFT agreement sufficient or do we need to provide a new TIS for the CD also?

If an AFT agreement is needed, what are some of the things that should be disclosed? For example, Is the saying in an agreement "Please change my CD interest payment method from a check by mail to a direct deposit" with the Account Type and Number and the customer's signature sufficient? Or should it include things such as Account to Debit, Account to Credit, Amount of Transfer, Date of First Transfer, Transfer Frequency, Customer Signature and a spot to revoke the authorization?
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Operations Compliance
#2195883 - 10/18/18 07:54 PM Re: CD Interest-Changing how the interest is paid out Likes to Comply
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
The transfers would not be subject to Reg E (see 1005.3(c)(5)) so there's no specific format you have to use. I'd get it in writing, with specifics on the from and to accounts. Don't specify the transfer amount if the request is to transfer all of each interest payment, and don't mention transfer dates (the transfers will happen when interest is credited). Do get a signature and give the customer a copy of the whole thing that includes instructions on how to change (different "to" account) or revoke the transfer request.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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