REG DD - Maturity Notice on Rollover CD w/term over 1 year

We send out the same new account disclosure that we give to new customers with the maturity notice on Auto-Renew CDs over 12 months. Concern has been expressed by some bank officers because it discloses the interest rate and APY posted the same day the notice and disclosure goes out. However, between that date and the actual maturity date, the rate may drop and actually roll over at a lower rate than what was disclosed on the maturity notice disclosure. Then you are dealing with an unhappy customer who wants to hold you to the rate on the disclosure. Of course, they don't pay attention to the verbage on the notice that the new APY and interest rate are not known as of this date and to please call on maturity date for rate information. We are considering ordering a rubber stamp to place on the disclosure form which accompanies the maturity notice that will state "SAMPLE DISCLOSURE - Interest Rate and Annual Percentage Yield disclosed below is based on ________ posted rate." On the blank line, we will put the effective date of the rate being quoted. Would there be any kind of compliance problem with doing this?

Wouldn't it be easier to devise a single sheet disclosure for your maturing rollover CDs that includes all the required information except the interest rate and APY? Sometimes we have to weigh the cost of an extra form against the "cost" of customer confusion and negative PR.

I'll bet your customers don't gripe when rates go UP between notice and rollover date!

[This message has been edited by John Burnett (edited 06-01-2001).]

I encourage you to not print the existing rate and APY. Simply state "the rate and APY have not been determined at this time. You can call _(insert phone #)__ on _(insert date of maturity)__ to learn the new interest rate and APY." That way you are not confusing them by printing a rate that they may not get.

I agree with David. We just disclose a phone number to call for current rate and APY info.