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#2171649 - 04/03/18 09:15 PM Reg DD Change in Terms
jonv Offline
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Posts: 102
We have a change in terms that is a benefit to the customer so no advance notice is required; we have increased our rate tiers to the benefit of the customer.

While no advance notice is required, is a subsequent notice required? Thanks.

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#2171665 - 04/03/18 10:26 PM Re: Reg DD Change in Terms jonv
rlcarey Offline
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rlcarey
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Galveston, TX
How is increasing your rate tiers beneficial?
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#2171721 - 04/04/18 01:12 PM Re: Reg DD Change in Terms rlcarey
jonv Offline
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Posts: 102
Good question. The particular product is a split tier interest product where you earn the following (for example):
Old Tiers:
Tier 1 = $0 - $20,000 @ .70%
Tier 2 = $20,001 - @ .10%

New Tiers:
Tier 1 = $0 - $100,000 @ .70%
Tier 2 = $100,001 - @ .10%

It is a split tier, so the interest rate within the tiers will only be paid for that portion of your account balance within that tier. In other words, customers have an opportunity to a higher rate on larger balances.

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#2171722 - 04/04/18 01:15 PM Re: Reg DD Change in Terms jonv
rlcarey Offline
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Galveston, TX
Maybe - but since it is a variable rate account, what is beneficial today may not be tomorrow.
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#2176109 - 05/01/18 05:34 PM Re: Reg DD Change in Terms jonv
Monster Offline
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Posts: 455
Randy, I'm in a similar situation as the OP. Can you explain more why the change may not be beneficial? Trying to determine if advance notice is required if the APY is increased as well as the tier for qualifying (DDA rewards account).

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#2176120 - 05/01/18 05:57 PM Re: Reg DD Change in Terms jonv
rlcarey Offline
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rlcarey
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Galveston, TX
So someday down the road or say the day after the change, the bank decides to change the interest rates paid to:

New Tiers:
Tier 1 = $0 - $100,000 @ .10%
Tier 2 = $100,001 - @ .70%

These are variable rate accounts and the bank reserves the right to change the rates at any time. Who is to say the change to the tiers in the long run is beneficial?
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#2176127 - 05/01/18 06:04 PM Re: Reg DD Change in Terms jonv
John Burnett Offline
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Cape Cod
Changing the structure of your tiers may not be adverse to anyone on its face, but, as Randy points out, it could become worse if the rates for those tiers change. So I recommend that you provide 30 days advance notice when changing tier structure, since you can never get cited for disclosing when you don't have to, but you can be cited for failing to disclose when you should have.

And for the record, Regulation DD doesn't provide for after-the-fact disclosures. That's sort of unique to Regulation CC.
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#2176188 - 05/01/18 08:09 PM Re: Reg DD Change in Terms jonv
Monster Offline
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Joined: Sep 2015
Posts: 455
Thankful for the forums because that was the only reason I was aware of the after-the-fact confusion between regulations. And of course for this latest, thank you both for your help!

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#2197962 - 11/09/18 06:36 PM Re: Reg DD Change in Terms Monster
RSC Offline
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Joined: Aug 2011
Posts: 69
Can the notice of the change be on the account statement or does it need to be a separate notice?

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#2197982 - 11/09/18 08:00 PM Re: Reg DD Change in Terms jonv
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,202
Illinois
Either. See the commentary to 1030.5.

(a) Change in terms.
(a)(1) Advance notice required.
1. Form of notice. Institutions may provide a change-in-term notice on or with a periodic statement or in another mailing. If an institution provides notice through revised account disclosures, the changed term must be highlighted in some manner. For example, institutions may note that a particular fee has been changed (also specifying the new amount) or use an accompanying letter that refers to the changed term.
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#2197989 - 11/09/18 08:24 PM Re: Reg DD Change in Terms BrianC
RSC Offline
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Posts: 69
Thank you Brian, I forgot to read the Interpretattion part.

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#2209872 - 03/29/19 03:23 PM Re: Reg DD Change in Terms jonv
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
Joined: Nov 2004
Posts: 487
Central Illinois
When changing tier structures on a variable rate account, is it necessary to disclose the APY's related to each tier or simply disclose the old tier levels and new tier levels with 30 day advance notice?

Example
Old Tiers
0-1000
1000.01 - 25,000
25,000.01 and over

NEW TIERS
0-25,000
25,000.01 - 100,000
100,000.01 - 250,000
over 250,000

Since it is already disclosed as a variable rate account where the rates can change at any time I don't see the need to disclose APY's.

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#2241870 - 09/01/20 04:23 PM Re: Reg DD Change in Terms jonv
Helpcompliance Offline
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Joined: Mar 2015
Posts: 31
Kentucky
Questions: Per Regulation DD, if the change is beneficial to the customer, like removing a fee, does this require any notification to the customer.

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#2241879 - 09/01/20 06:18 PM Re: Reg DD Change in Terms jonv
BrianC Online
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Illinois
No. Any notification you provide would be from a customer service/marking perspective.
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#2241884 - 09/01/20 06:40 PM Re: Reg DD Change in Terms BrianC
Helpcompliance Offline
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Kentucky
Thank you!

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