Skip to content
BOL Conferences
Thread Options
#2171649 - 04/03/18 09:15 PM Reg DD Change in Terms
jonv Offline
100 Club
Joined: Jul 2009
Posts: 107
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.

Return to Top
Deposits and Payments
#2171665 - 04/03/18 10:26 PM Re: Reg DD Change in Terms jonv
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
How is increasing your rate tiers beneficial?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2171721 - 04/04/18 01:12 PM Re: Reg DD Change in Terms rlcarey
jonv Offline
100 Club
Joined: Jul 2009
Posts: 107
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.

Return to Top
#2171722 - 04/04/18 01:15 PM Re: Reg DD Change in Terms jonv
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
Maybe - but since it is a variable rate account, what is beneficial today may not be tomorrow.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2176109 - 05/01/18 05:34 PM Re: Reg DD Change in Terms jonv
Monster Offline
Platinum Poster
Joined: Sep 2015
Posts: 500
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).

Return to Top
#2176120 - 05/01/18 05:57 PM Re: Reg DD Change in Terms jonv
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,226
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?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2176127 - 05/01/18 06:04 PM Re: Reg DD Change in Terms jonv
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
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.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2176188 - 05/01/18 08:09 PM Re: Reg DD Change in Terms jonv
Monster Offline
Platinum Poster
Joined: Sep 2015
Posts: 500
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!

Return to Top
#2197962 - 11/09/18 06:36 PM Re: Reg DD Change in Terms Monster
RSC Offline
Member
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?

Return to Top
#2197982 - 11/09/18 08:00 PM Re: Reg DD Change in Terms jonv
BrianC Online
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,685
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.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2197989 - 11/09/18 08:24 PM Re: Reg DD Change in Terms BrianC
RSC Offline
Member
Joined: Aug 2011
Posts: 69
Thank you Brian, I forgot to read the Interpretattion part.

Return to Top
#2209872 - 03/29/19 03:23 PM Re: Reg DD Change in Terms jonv
Oursisnottoreasonwhy Offline
Platinum Poster
Oursisnottoreasonwhy
Joined: Nov 2004
Posts: 503
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.

Return to Top
#2241870 - 09/01/20 04:23 PM Re: Reg DD Change in Terms jonv
Helpcompliance Offline
Junior Member
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.

Return to Top
#2241879 - 09/01/20 06:18 PM Re: Reg DD Change in Terms jonv
BrianC Online
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
No. Any notification you provide would be from a customer service/marking perspective.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2241884 - 09/01/20 06:40 PM Re: Reg DD Change in Terms BrianC
Helpcompliance Offline
Junior Member
Joined: Mar 2015
Posts: 31
Kentucky
Thank you!

Return to Top

Moderator:  John Burnett