We have an employee account and a Senior Club account, both earn interest. There are fees waived and free services. There is nothing in the account agreement or TISA about converting the accounts if they no longer meet the criteria and we want to clean up these accounts. Does it make sense to add it to the TISA now, which is the only thing we can customize, and send the revised TISA and Fee Schedule along with the letter informing them the account will be converted in 30-days if they don't bring their balance up? Obviously, the ex-employees can't do anything to change their situation.

For the employee accounts, we would include the Basic Checking TISA and fee schedule, then convert them at the end of 30 days if they haven't made any changes themselves..

For the Senior Club accounts, if they don't meet the requirements at the end of the 30-day period, we would inform them the account is no longer eligible for the Senior Club status and the account will be converted to the Basic checking in 30 days. We would provide a full set of disclosures with this change in terms notice and convert the accounts at the end of the 30 days.

Does this sound feasible? If so, I know we will need to notify existing employees and Senior Club holders of this change too. Would it require a revised TISA or could it be a statement message?

Any assistance is appreciated.

Sounds good to me. Not sure what you mean by "we will need to notify existing employees and Senior Club holders of this change". Is this not already in your employee and Senior Club disclosures? You are still going to have to mail them a current disclosure for the Basic Checking account if you convert them.

You're converting the terms of the account. As you point out you'll send a notice that says:
- you don't appear to meet the criteria for this current account type
- after 30 days your account will be converted to XYZ, disclosures enclosed.

You might add the option that the can contact the bank and change it sooner if desired, and/or choose a different product.

If the bank really wants to re-verify their qualification you could add that in but it seems like you're adding to a manual process. Who knows though, if it's a low balance issue they may move money there and you'd preserve the account as is.

I'm not sure I understand your comment on "add it to the TISA now..." and such? This is not an uncommon such as "back in the day" when a NOW or MMDA had to be converted to a new product.

Right, it is not in our current disclosures. Which is why I want to get it in them so they can make the change without needing the 30 day notice. Once the accounts are converted, the disclosures will be sent.

Thanks!

We don't have the conversion information in the disclosures now and I want to add it so in the future, we can just make the change and not need to send a change in terms notice, just the new disclosures for the converted accoutn. Especially on the employee account.

Follow up on this.... We have a single TIS disclosure with an addendum that shows rates, minimum balance, etc. We have an account that is available until the account holder turns 24. Our TIS disclosure states "account will be converted to a xxxxxxxxxxxxxxx checking account (see below) once the primary account holder reaches the age of 24 years." Below is the description of the xxxxxxxxxxxxxxx checking account that includes language regarding fees, etc, and the addendum attached shows rates, minimum balances, etc.

Is this sufficient for this to be considered "disclosed" at account opening, with the change in terms notice not being necessary? Would we then only need to send them an updated TIS?

Depends if you have also sent them all a change in terms that may have occurred on the account that they are going to convert to since the time of account opening. Sending an updated TISA disclosure at the time of conversion might be cleaner.

Good point! I will have to make sure we do. I do plan on sending an updated TISA at the time of conversion, along with a letter. I was just hoping to avoid the advance change in terms notice if possible.

One more question if anyone is still out there......I am discussing with management the process to sending change in terms to employees as we are converting their checking accounts to a new product. I am having a hard time with presenting the fact that employees are still consumers, and if we want to email these disclosures we would need to have prior consent as well as use the email address provided at the time of consent.

They would like to just use our normal internal email to send these out to employees. Is it me? Am I wrong in thinking we would need to follow the e-consent rules?

There is no mention of E-Sign in 1030.5, but there is no exclusion either. Since these are disclosure that have to be delivered in written form, under the E-Sign Act, it would require E-Sign consent, since there is no exclusion in the TISA.

(c) CONSUMER DISCLOSURES.—
(1) CONSENT TO ELECTRONIC RECORDS.—Notwithstanding
subsection (a), if a statute, regulation, or other rule of law
requires that information relating to a transaction or transactions
in or affecting interstate or foreign commerce be provided
or made available to a consumer in writing,..........

Thank you again. I am so looking forward to vacation next week.

Be careful and watch out that management doesn't send our the notices by email while you're away from the bank!

We have a savings product X. There are tiered rates disclosed on the current TISA. All are at 0.01%. We are looking to create a youth savings account. It will mirror savings product X. Do we need to send an advanced change in terms to the youth or can we convert since there is not a negative impact to them? If we remove the tiered rates but everything else is the same, does that change the answer in your opinion?

I do not understand what you are asking. Converting from a tiered rate account to a non-tiered rate account requires prior notice. Good luck in getting any new business. I am getting 5%+ on my money market account.

We want to move youth from product X to new product Y, for youth only. there are tiers in product X, all currently the same rate. If we move all youth to product Y and it is the same exact product as product X, do we need to give 30 day advance change in terms? I am using that rate as an example because I have no idea what it is I just know it is low. I do not make the dumb decisions I just figure out how we can make the dumb decisions in compliance

The move from a tiered account to a non-tiered account IMHO triggers advance notice. While there might not be any difference today because you think all your tiers are the same interest rate, since you have reserved the ability to pay higher rates on the different tiers, you are not able to make a judgement as to whether or not the new account is going to be a negative or positive change compared from the old account.

Ok we are on the same page. We need to keep the tiers so the product is the same if they don't want to send an advanced notice.

Thanks Randy.