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#528268 - 04/06/06 06:18 PM Spelling out the APY
Banker Sue Offline
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Joined: May 2004
Posts: 149
I don't "do" deposit compliance so I was not sure how to answer a question asked to me.

When advertising a CD rate on a marquee sign in front of the branch does the rate have to be spelled out? For example can the sign read 5%APY or does it have to say 5.00%APY.

Thanks for the help!

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#528269 - 04/06/06 06:28 PM Re: Spelling out the APY
John Burnett Offline
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John Burnett
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Cape Cod
Bad news on two counts:
1. You must use two decimal places, so you need space for "5.00%"
2. You can't abbreviate "annual percentage yield" because you don't have any way to say it elsewhere on the sign.
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#528270 - 04/06/06 06:34 PM Re: Spelling out the APY
Banker Sue Offline
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Joined: May 2004
Posts: 149
Can you tell me where to look, the boss is going to want proof. And like I said I don't do the deposits, so excuse the basic questions. So the whole APY has to be spelled out too? There are no special rules for marquee's?

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#528271 - 04/06/06 06:49 PM Re: Spelling out the APY
John Burnett Offline
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John Burnett
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Cape Cod
The rule is found in section 230.8(e) of Regulation DD. You'll see there that displaying the APY will send you back to find, in section 230.8(c), that you have to also state the minimum balance to earn the APY, and the term of the CD that pays that yield.

And you will see, in section 230.8(e)(2), that the only time you get to use "APY" without spelling it out at least once in the ad is on "indoor signs," often referred to as "rate boards."
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#528272 - 04/06/06 07:20 PM Re: Spelling out the APY
RFitzpatrick Offline
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RFitzpatrick
Joined: Apr 2002
Posts: 424
Pacific NW
While John is correct, of course, on all these points. this is often a "risk" issue for many banks. Driving around my area I see marquees/readerboards which don't quite make the all the requirements almost every day. It's probably something only a Compliance Officer would notice. Usually the APY is not written out, but the term, APY (to two decimals), and minimum deposit are included. While technically in violation of the reg, I haven't heard of this being a big issue, except in print ads.
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#528273 - 04/06/06 07:27 PM Re: Spelling out the APY
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,801
Cape Cod
Thanks, R. I agree with your assessment of the risk.
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