Reg DD Change in Terms

We have a change in terms that is a benefit to the customer so no advance notice is required; we have increased our rate tiers to the benefit of the customer.

While no advance notice is required, is a subsequent notice required? Thanks.

How is increasing your rate tiers beneficial?

Good question. The particular product is a split tier interest product where you earn the following (for example):
Old Tiers:
Tier 1 = $0 - $20,000 @ .70%
Tier 2 = $20,001 - @ .10%

New Tiers:
Tier 1 = $0 - $100,000 @ .70%
Tier 2 = $100,001 - @ .10%

It is a split tier, so the interest rate within the tiers will only be paid for that portion of your account balance within that tier. In other words, customers have an opportunity to a higher rate on larger balances.

Maybe - but since it is a variable rate account, what is beneficial today may not be tomorrow.

Randy, I'm in a similar situation as the OP. Can you explain more why the change may not be beneficial? Trying to determine if advance notice is required if the APY is increased as well as the tier for qualifying (DDA rewards account).

So someday down the road or say the day after the change, the bank decides to change the interest rates paid to:

New Tiers:
Tier 1 = $0 - $100,000 @ .10%
Tier 2 = $100,001 - @ .70%

These are variable rate accounts and the bank reserves the right to change the rates at any time. Who is to say the change to the tiers in the long run is beneficial?

Changing the structure of your tiers may not be adverse to anyone on its face, but, as Randy points out, it could become worse if the rates for those tiers change. So I recommend that you provide 30 days advance notice when changing tier structure, since you can never get cited for disclosing when you don't have to, but you can be cited for failing to disclose when you should have.

And for the record, Regulation DD doesn't provide for after-the-fact disclosures. That's sort of unique to Regulation CC.

Thankful for the forums because that was the only reason I was aware of the after-the-fact confusion between regulations. And of course for this latest, thank you both for your help!

Can the notice of the change be on the account statement or does it need to be a separate notice?

Either. See the commentary to 1030.5.

(a) Change in terms.
(a)(1) Advance notice required.
1. Form of notice. Institutions may provide a change-in-term notice on or with a periodic statement or in another mailing. If an institution provides notice through revised account disclosures, the changed term must be highlighted in some manner. For example, institutions may note that a particular fee has been changed (also specifying the new amount) or use an accompanying letter that refers to the changed term.

Thank you Brian, I forgot to read the Interpretattion part.

When changing tier structures on a variable rate account, is it necessary to disclose the APY's related to each tier or simply disclose the old tier levels and new tier levels with 30 day advance notice?

Example
Old Tiers
0-1000
1000.01 - 25,000
25,000.01 and over

NEW TIERS
0-25,000
25,000.01 - 100,000
100,000.01 - 250,000
over 250,000

Since it is already disclosed as a variable rate account where the rates can change at any time I don't see the need to disclose APY's.

Questions: Per Regulation DD, if the change is beneficial to the customer, like removing a fee, does this require any notification to the customer.

No. Any notification you provide would be from a customer service/marking perspective.

Thank you!