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#2269952 - 05/02/22 09:00 PM Unwaive Monthly Fee - Notice to Customer?
Anonymous
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Currently, we waive monthly maintenance fees on a particular account type, if the account is held in the name of a minor (until they reach the age of 18). This is included in our current account TISA disclosure.

However, over the years the bank hasn't done a good job of monitoring this and some "old" accounts remain open with this fee being waived, even though the account owner is no longer a minor. Our current core system has set-up functionality to monitor this for the bank and waive the fee while the owner is under 18. We have considered cleaning this up so all accounts of this type are consistent (in other words turning the fee flag "on" for some of these old accounts that should no longer have the fee waived).

If we were to do this would we be required to notify these customers that we are now un-waiving this fee? Seems like this would be good PR to me, rather than just starting to charge a monthly fee to long-time existing customers; but I've been asked whether this is REQUIRED or not, in this situation.

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#2269953 - 05/02/22 09:06 PM Re: Unwaive Monthly Fee - Notice to Customer? Anonymous
BrianC Online
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Illinois
Reg DD does not require advance notice when account terms change based on a specific event, (but notice is still required at the time the change occurs.) See the commentary to 1030.5.

3. Terms that change upon the occurrence of an event. An institution offering terms that will automatically change upon the occurrence of a stated event need not send an advance notice of the change provided the institution fully describes the conditions of the change in the account opening disclosures (and sends any change- in-term notices regardless of whether the changed term affects that consumer's account at that time).

However, since you did not change the terms consistent with the timeframe that was previously disclosed, to avoid accusations of unfair or deceptive practices, you should provide advance notice to accounts that you are changing.
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#2269956 - 05/02/22 10:18 PM Re: Unwaive Monthly Fee - Notice to Customer? Anonymous
rlcarey Online
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Galveston, TX
If you are charging according to your legal contract, then no notice is specifically required. However, with the CFPB, any UDAAP considerations might override that. I would pre-notify, if you can successfully identify the impacted customers as a curtesy and eliminate any potential issues.
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#2269985 - 05/03/22 05:18 PM Re: Unwaive Monthly Fee - Notice to Customer? Anonymous
Anonymous
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How many accounts are you talking about? 10's? Or 100's? Might be a good opportunity to reach out to these "minors" to see how you can further assist them on their financial journey.

Another question: are these UTMA accounts? If they are, perhaps they need to be switched to a more traditional account now that the minor has reached age of majority?

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#2270009 - 05/03/22 08:48 PM Re: Unwaive Monthly Fee - Notice to Customer? Anonymous
John Burnett Offline
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John Burnett
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Cape Cod
Originally Posted by Anonymous
Another question: are these UTMA accounts? If they are, perhaps they need to be switched to a more traditional account now that the minor has reached age of majority?

I'd be careful about "switching" account types on UTMA accounts. State laws don't generally allow the bank to turn UTMA funds over directly to the aged-out minor. Your customer is the custodian. The custodian is (again, generally) the only person who can turn the funds over. When that happens, the UTMA account should be closed, not converted.
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#2270021 - 05/04/22 01:39 PM Re: Unwaive Monthly Fee - Notice to Customer? Anonymous
TaraSue Offline
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Joined: Oct 2013
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At a former institution, a monthly report was created for those turning eighteen and another for UTMA accounts where minor was of age. Bankers would place outbound calls to custodians for both. We had very good success with notifications and, especially, with closing out UTMAs and opening an alternative account. We started this years ago, after a young man came in to withdraw from his UTMA. He had gone through boot camp and was being deployed overseas and I couldn't help him. It just didn't feel right. (Yes, his mom did come in later in the day and close the account and give him the cash.) I have only worked from small institutions, so that level of customer contact and support is what differentiated us from the large bank down the street. To be fair, there just weren't that many accounts in either of those positions on any given month so the number of outbound calls was reasonable. That may not be true for other institutions.

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#2270027 - 05/04/22 03:49 PM Re: Unwaive Monthly Fee - Notice to Customer? John Burnett
Anonymous
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Originally Posted by John Burnett
Originally Posted by Anonymous
Another question: are these UTMA accounts? If they are, perhaps they need to be switched to a more traditional account now that the minor has reached age of majority?

I'd be careful about "switching" account types on UTMA accounts. State laws don't generally allow the bank to turn UTMA funds over directly to the aged-out minor. Your customer is the custodian. The custodian is (again, generally) the only person who can turn the funds over. When that happens, the UTMA account should be closed, not converted.

I should have been more clear; yes, that's exactly what I meant. Not an "automatic" switching, but research into finding if these should be changed, with consent.

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