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#2223177 - 10/07/19 05:14 PM Reg DD, Section 1030.8(c)(1)
Michael M Offline
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Joined: Oct 2019
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Hey Everyone!

I wanted to post this thread in hopes to receive some help on an audit that I am working on. When reviewing marketing materials related to deposit accounts displaying an APY, I noticed the ad does not state that rates may change after account opening. Reg DD, Section 1030.8(c)(1) states the following: “When additional disclosures are required. Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously:(1) Variable rates. For variable-rate accounts, a statement that the rate may change after the account is opened”.

The Auditee is informing me that by stating the rate is variable, they meet the intent of the reg requirement shown above. I do not believe this is correct, as the auditee is assuming a consumer knows the definition of a variable rate and should know rates may change after account opening. Is my thinking correct. I would appreciate thoughts on this topic. Thanks in advance!

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#2223180 - 10/07/19 05:22 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
Skittles Online
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Skittles
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TN
Directly from Reg DD 1030.8:

(c) When additional disclosures are required. Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously:

(1) Variable rates. For variable-rate accounts, a statement that the rate may change after the account is opened.
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#2223191 - 10/07/19 05:54 PM Re: Reg DD, Section 1030.8(c)(1) Skittles
TomS Offline
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I agree, there needs to be a statement that specifically says the rate may change after the account is opened. Simply stating "variable rate" isn't going to cut it.
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#2223324 - 10/08/19 06:02 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
burkemi Offline
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Your auditee is making very little sense. The reg plainly states that "variable rate" must be accompanied by a statement that the rate may change after the account is opened.

So many regs and pieces of regs are grey and prone to multiple interpretations. When a piece is as black and white as this one comes along, it's a nice change; stand your ground.
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#2223410 - 10/09/19 03:00 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
Michael M Offline
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Joined: Oct 2019
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Excellent! I appreciate your responses and absolutely agree. Thanks.

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#2224302 - 10/24/19 12:02 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
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Joined: Dec 2017
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I am reviewing savings and checking account statement disclosure. On our statement the disclosure reads as "In case of errors or questions about your bill (regulation Z - Consumer Accounts only) if you think your bill is wrong, or if you need more information about the transactions on your bill, write us on a separate piece sheet at the address shown on your bill, as soon as possible. We must hear from you no longer than 60 days after we sent you the first bill on which error or problem appeared. You can telephone us, but doing so will not preserve your rights.

Under New Jersey State Law this statement represents an accounting between the Bank and you. If there is an error in it, call it to the Bank's attention promptly in writing, at the address shown of the front of this statement. Failure to do so within in 3 months from the date of this statement may bar your right to have the error corrected.

In your letter, give us the following information:
Your name and account number.
The dollar amount of the suspected error.
Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are unsure about.

You do not have to pay any amount in question while we are investigating, but you are still obligated to pay the parts of your bill that are not in question. While we investigate your question, we cannot report you as delinquent or take any action to collect the amount in question".

I don't believe this disclosure to be appropriate for savings and checking account since Reg Z has to do with consumer lending not deposit accounts. Please advise if this is correct or not. If it is not correct, what disclosure should it be?

I appreciate any input. Thank you.

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#2224304 - 10/24/19 12:46 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
burkemi Offline
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Look at Appendix A of Reg E, Model Form A-3.
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#2224307 - 10/24/19 01:11 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
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Joined: Dec 2017
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Thank you burkemi for your feedback. I did look there and we do have A-3(b) Error resolution notice on periodic statement relating to errors or questions about electronic transfers, so we are good there. My question is do we need the disclose the Reg Z - Consumer accounts I noted in my original post. I don't believe that to be accurate.

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#2224323 - 10/24/19 03:47 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
burkemi Offline
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I agree that the Reg Z portion isn't needed for a deposit disclosure since there is no bill to dispute. If you're already using the appropriate Reg E disclosure I don't think the Reg Z portion needs to be replaced - just removed.
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#2224522 - 10/28/19 02:12 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
StevenD Offline
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Joined: Nov 2000
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KY
Do any of your checking account statements have an overdraft protection open-end credit line attached to the account with the billing as part of the checking account statement?
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#2224523 - 10/28/19 02:22 PM Re: Reg DD, Section 1030.8(c)(1) Michael M
rlcarey Online
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Galveston, TX
Not that unusual. Lots of systems are set up to do just that for a specific OD line of credit..
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