Thread Starter: Anonymous
Title: Re: Special Terms and Rate for One CD Account
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Several years ago, we stopped offering a CD product that allowed customers to make deposits after initial account opening. Any language related to this product was removed from our CD disclosures. The product is no longer listed on our product sheet. A year later, a customer was allowed to open a CD under the discontinued terms. Audit caught the error and the system was updated to reflect a standard product. However the customer was not informed he could not continue to make deposit. This was recently uncovered in another audit finding. The Deposit Ops Manager is insisting the deposits be allowed to continue. She also increased his rate to a special rate and refuses to change it, even though the Board voted several months ago to stop offering this rate on specials due to cost of funds concerns. The rate is double the local average.
I know this is a lot to unwind, but I’m concerned because we are under an enforcement action that includes issues related to governance and consumer compliance risk management. We really can’t afford to raise any red flags. I’m new to audit and concerned about the resistance to corrective actions.
My questions are:
1. Are we at risk with Reg DD concerning proper disclosures?
2. Is there governance/oversight risk in applying a rate the board has voted to eliminate?
3. Are we required to offer this product to all customers if we offer it to one? Is it only a potential reputation risk or is it possible discrimination/ unfair practices? This product was discontinued because it became a headache to maintain. I don’t want to subject to additional risk because of operations issues due to volume.
4. Any advice on handling stubborn responses to audit findings? I’m documenting this from top to bottom but finding the level of resistance on this one frustrating.
Any help at all on any part of this is much appreciated.
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