If we change a customer's product from a free checking account to an interest bearing account at their request (completely different products), do we have to give any other disclosures than the Reg DD Truth in Savings disclosure? Are new Reg E EFT and Reg CC Funds Availability disclosures required to be given too? We are not actually closing one account and opening another (no new account number) - we are changing the product code.

Reg. E and CC - no. Do you need to give them a new depositor's agreement for the account in question - ask your legal counsel.

Thank you

I am working on this same question as to whether or not a deposit account disclosure, ours includes the product information, Reg. E and Reg. CC, when a customer requests a different deposit product. The account number stays the same but the account changes. We have an added challenge because as of January 1st we will be providing specific account information on a simplified "PEW" -like disclosure. The simplified disclosure is not a full deposit account disclosure on its own but does contain all the account information, including features and fees of the specific account. We are trying to determine if we are only required to provide the customer, who is changing account types, the simplified disclosure or the full deposit account disclosure.

I am unclear as to why legal counsel would be the determining factor as to if the full disclosure is required or not. Reg. DD states the disclosure is required when an account is opened. Even though the customer is not opening a new relationship, in essence they are closing one account and obtaining a new account. If they already had an account and later decided to open a second account they would receive the full disclosure. What if the first account was opened 5 years prior and there had been many changes to the account disclosure over that time? Even if they had received Change in Terms notices or Important Information notices alerting them to any negative changes to their account over the years shouldn't they receive a full disclosure according to the rule? Any and all opinions are appreciated.

Your questions are the exact reason that I suggested consulting legal counsel. Without knowing how your depositor agreement (and I am talking about the contract between the bank and the customer and not regulatory disclosures) is structured, as there is no one answer to your questions. You want to make sure that your contract is still valid and the consumer is fully informed about all rules and conditions of maintaining the new account. Regulatory disclosures are just that. Your depositor's contract is what will or will not keep you from losing your shirt in a lawsuit.

Thank you! I appreciate your insight.

I know legal counsel should be sought out on this question and disclosures reviewed, but what are your thoughts on having new signature cards signed when the account type changes?

The easy answer is "Yes, a new contract should be executed."

It would be impossible to say that it was unnecessary without reading both contracts; hence the suggestion to involve legal counsel.