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#2242974 - 09/23/20 03:08 PM OD LOC - Fee Change Notice-timing requirements
Aruba123 Offline
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Posts: 70
New York
Hello - When there is a change in the sweep fee amount charged per day to the OD LOC (subject to Rez Z), would the change in terms notice have a 30 day advance notice requirement or a 45 day requirement. There is some confusion surrounding the timing and was wondering if anyone has any feedback on that.

Thank you.

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#2242975 - 09/23/20 03:11 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
rlcarey Online
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rlcarey
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Galveston, TX
1026.9(c)(2)(i) Changes where written advance notice is required. (A) General. For plans other than home-equity plans subject to the requirements of §1026.40, except as provided in paragraphs (c)(2)(i)(B), (c)(2)(iii) and (c)(2)(v) of this section, when a significant change in account terms as described in paragraph (c)(2)(ii) of this section is made, a creditor must provide a written notice of the change at least 45 days prior to the effective date of the change to each consumer who may be affected.
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#2242979 - 09/23/20 03:47 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
Aruba123 Offline
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New York
Thank you - It's 45 days for a significant change in account terms -when reviewing (c)(2)(ii) and § 1026.6(b)(1), (b)(2), § 1026.6(b)(4) a change in the "sweep fee" doesn't seem to fit the definition of significant change in terms. Am I missing something?

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#2242983 - 09/23/20 04:16 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
rlcarey Online
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rlcarey
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Galveston, TX
(ii) Significant changes in account terms. For purposes of this section, a “significant change in account terms” means a change to a term required to be disclosed under §1026.6(b)(1) and (b)(2),

Transaction charges have to be disclosed under 6(b)(2)(iv)
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#2242986 - 09/23/20 04:55 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
Aruba123 Offline
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Joined: Jan 2012
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New York
I read 6(b)(2)(iv) Transaction charges. Any transaction charge imposed by the creditor for use of the open-end plan for purchases.

This is a fee that will be charged to the OD LOC if there is a need to transfer funds to the checking account to cover an overdraft. I was thinking it was a fee for the service and not for purchases, therefore the 45 days would not apply, but now I'm questioning whether that makes a difference.

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#2243003 - 09/23/20 08:18 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
rlcarey Online
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Well, you might have a point - so you think it falls under the disclosure requirements .6(b)(3)?
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#2243043 - 09/24/20 03:50 PM Re: OD LOC - Fee Change Notice-timing requirements rlcarey
Aruba123 Offline
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New York
Because the fee will be charged to the OD LOC - would it be considered a finance charge? If so, I think that would fall under 1026.6(b)(3) and in that case we could either:

[i]A) Comply with the requirements of paragraph (c)(2)(i) of this section; or (send a 45 day notice of the change)

[i](B) Provide notice of the amount of the charge before the consumer agrees to or becomes obligated to pay the charge, at a time and in a manner that a consumer would be likely to notice the disclosure of the charge. The notice may be provided orally or in writing. (send a 30 day notice of the change)

Any thoughts would be greatly appreciated!

Thank you.

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#2243055 - 09/24/20 04:31 PM Re: OD LOC - Fee Change Notice-timing requirements Aruba123
rlcarey Online
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It is definitely a finance charge - so I do agree with your analysis.
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#2243101 - 09/24/20 10:01 PM Re: OD LOC - Fee Change Notice-timing requirements rlcarey
Aruba123 Offline
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New York
Thank you for your help!

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