a customer who has 4 IRA’s with us is under the impression that since she is over 70 ½ years old that she can transfer those to another financial institution and that we should not charge a penalty since they have not matured. Does anyone know if this is correct?

Some institutions may choose to waive bank early withdrawal penalties for CDs and some choose not to. Customers often equate these rules with the fact that tax penalties do not apply to distributions once the IRA owner passes 59 1/2.

There is no regulatory requirement for you to waive a CD early withdrawal penalty in this case.

Look at the initial disclosure you gave him when the account was opened...

This issue should be addressed there.