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#2215618 - 06/12/19 09:53 PM MMA with a promo rate fixed for 6 mo then variable
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
On these particular accounts several of the "promo" account holders want to negotiate a new rate now that the initial period is up and mgmt. wishes to do so... my question is - new TISA disclosure for the new rate and terms. (yes or no) .. i.e. promo for another 6 mo. period for example ... or are we OK since we disclosed it as " rate is variable and may change" on the original disclosure..

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#2215627 - 06/13/19 01:45 AM Re: MMA with a promo rate fixed for 6 mo then variable Chocaholic
BrianC Offline
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BrianC
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Illinois
You're not opening a new account. Money markets don't have a maturity date. You're not making a change that is adverse to the customer. You don't have to provide a TIS on an account that is already open.

As a side note, I hope that the criteria for such negotiations is documented in procedures and that your ALCO committee has blessed what options management has to work with.
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#2215690 - 06/13/19 06:06 PM Re: MMA with a promo rate fixed for 6 mo then variable BrianC
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you for your response - would your response be different if the rate drops... as to your guidance not nearly enough support but team is working on that part.

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#2215693 - 06/13/19 06:12 PM Re: MMA with a promo rate fixed for 6 mo then variable Chocaholic
BrianC Offline
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BrianC
Joined: Nov 2004
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Illinois
Depending on the initial TIS.

What do we say about frequency of rate changes? What do we say about how the rate is determined?

If we advertise a variable rate that changes at our discretion, then we can do whatever we want with the rate after 6 months without redisclosure. If we advertise that the rate is tied to an index (say Prime minus 2.00%) and we are changing the index calculation to Prime minus 2.50%, then we would need to provide advance notice.
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#2215718 - 06/13/19 09:54 PM Re: MMA with a promo rate fixed for 6 mo then variable Chocaholic
Andy_Z Offline
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I suppose I'm old fashioned on this. What do they want different than what was scheduled when the promotional rate ended, and if rates did drop and the bank wanted to renegotiate the rates, what would they say?

My point is, this is as good as "hot" money, brokered deposits going wherever the rate is best. And I echo Brian's comments about ALCO and management inclusion. And while there is no "fair banking" law I'd hope all customers are treated equally here.
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