Change from Interest to Non-Interest Bearing Acct

We recently had a request from a customer to convert their account from an interest bearing account to a non-interest bearing account. They happened to make this request on the day before their statement cut off, so they did not receive the interest that had accrued. They asked for it, and we calculated in manually and gave to them.

Our disclosures do not address this type of situation (converting and account) - only that an "account closure" results in the forfeiture of interest accrued.

Has anyone provided for this in their general account disclosure? It's not a common request, but I'm just wondering if we should consider adding something at the next update to our disclosures.

Reg DD only requires a disclosure for what happens to accrued interest if an account is closed prior to interest being credited. Adding a disclosure that is not required (and for which there is no model language) to address a rare request is not something I'd recommend. If you want to have something in your procedures that directs staff how to handle these requests consistently, that's fine.

Thanks Brian. Good point. And I like your recommendation!

You did provide disclosures for the new account, right?

Yes, our employees know to deliver disclosures when converting accounts to another type.