1) Is there a Reg DD issue with the following scenario – I hope this description is not confusing!
Pre-conversion, we had a product code for 13 month CDs (which we regularly offer). Post-conversion, there was no product code set up for 13 month CDs, so all of the 13 month CDs transferred over with the ORIGINAL 13 month term, but under the 18 month product code. There was absolutely no change in term or rate with the conversion…However, when the CD automatically renews, it renews for the same 13 month term, but the system will assign the rate associated with the 18 month product, rather than the 13 month rate.
When we send the CD Renewal Notice 30 days in advance of maturity, we give the telephone number for customers to call to obtain the rate closer to the maturity date. Essentially, the CD will renew at the correct term (13 mos) but at an un-matching rate (18 mo rate). Am I over-thinking this, or is this a real problem?
2) We are sending out the same CD Renewal Notice for all CD terms longer than one month. These notices give the maturity date, state that the CD will automatically renew (unless we receive other instruction) and we give our phone number to inquire about the renewal rates. In reading 230.5, I am concerned that for CDs longer than one year we are not complying with 230.5(b)(1)…do we need to send entirely new TISA disclosures for the renewed account (i.e., accrual of interest, amount of early withdrawal penalties, etc.)?
THANKS