The bank is wanting to change its inactive and dormant timeframes from 12 and 24 months to 15 and 36 months respectively. This information is currently provided in the initial TIS disclosure. Would this require a notification to the customer of the change due to the timeframes changing?

Since the change is to the customer's benefit (I presume you disclose the timeframe because a fee is imposed) no change in terms notice is required under Reg DD.

If you haven't already be sure to check you state statutes for any specified time frames. From the IN Code:

(c) For the purpose of this section:

(1) a transaction account (as defined in 12 CFR 204.2(e)) is considered a dormant account after one (1) year from the date of the last transaction recorded on the books of the bank, savings bank, or trust company with respect to the account; and

(2) any other account that is not a transaction account (as defined in 12 CFR 204.2(e)) is considered a dormant account after three (3) years from the date of the last transaction recorded on the books of the bank, savings bank, or trust company with respect to the account.

Dan makes a good point . Do not confuse dormant as defined by State law and the account being inactive as defined by the bank. And if the change is not detrimental to the depositor, pre-notification is not required, but that does not mean you do not need to send a change in terms notice to modify your depositor's contract or redisclose under Regulation DD.

There are no requirements on what fees the bank have on dormant service charges are there?

Any requirements would be a matter of state law.

In some State there are rules on fees and then you also may have to follow specific rules to the letter. I worked at bank that was not following the rules and had to write a check to the State in the 6 figure range and the cost of the research and negotiation to come up with that number was also probably that expensive.

The Board is responsible for establishing the fee and the reasonableness for that fee. Generally it is based on the documented estimated cost for maintaining the account.

From the IN Code - IC 28-1-20-1.1

(b) Any bank, savings bank, or trust company may impose and
collect a monthly service charge and maintenance charge on dormant
accounts, in amounts that:
(1) are reasonable, as determined by resolution of the board of
directors; and
(2) are properly disclosed to the bank's, savings bank's, or trust
company's depositors.