Bank A has expensive informational packages in its lobby that contain documents detailing the history of the bank, small business credit card application, the FDIC "Insuring Your Deposits" brochure, etc. There is a statement on the inside front liner of the informational package which reads" Do you like free accounts? Every one of ours is free." Unfortunately, the bank assessed a transaction fee for those Money Market accountholders who exceed the MMDA transaction maximums allowed per month. Reg DD's 230.8 (a)(2) does not allow banks to refer to accounts as "free" "if any maintenance or activity fee may be imposed on the account".

However, the bank correctly disclosures the transaction limitations as required by Reg DD's 230.4(b)(5) and lists the applicable amount of the fee as required by 230.4(b)(4). The bank has ordered a ton of these expensive informational packages and tossing all of the current packages would be costly. The misleading term "free" is on the inside page of the informational package and it would not be cosmetically appealing to put a band-aid over it to cover the term "free" or to mark it out. Reg DD does not contain any penalty or enforcement language other than referring to Section 8 of the FDIC Act which seems to be reserved for extremely egregious acts that lead to C&Ds.

Any thoughts on whether to try to correct immediately or attempt to make it thru this batch of brochures before correcting? Would it be acceptable to place a schedule of fees, which contains the transaction limitations and monetary fees for exceeding the limitations, in this brochure and highlight the fee in order to draw attention to the fact that fees will be charged if the accountholder exceeds the 3/6 MMDA maximums? The bank would obviously like to continue using these brochures until the present supply is exhausted at which time the offending language would be removed.

Alternatively, Section 230.5 of Reg DD allows for subsequent disclosures. The applicable Commentary states that an advance notice need not be sent if the bank fully describes the conditions of the change in the account opening disclosures (this was done correctly) - AND sends any change-in-terms notice regardless of whether the changed terms affects that consumers account at that time. As another alternative to reprinting - any thoughts on adding a statement stuffer in all existing, as well as any new MMDAs opened until the brochure is reprinted, which again disclosures the transaction limitations and the fee?

I would risk/cost this. What's the risk? As you indicated, there is little Reg DD risk (no penalty or enforcement issues). However, some examiners are threatening the UDAP issue on this type of issue. I don't think this is likely, but possible.

I would not draw attention to this issue by putting the schedule of fees (highlighted) in the brochure. This doesn't fix the error. I also wouldn't worry about the statement stuffer. If you correctly disclose on the initial disclosure, you handled that part correctly.

My opinion: This isn't a huge issue. If management doesn't want to throw them out, I wouldn't lose sleep over it.