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Converting Passbook Savings to Statement

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Question: 
We are converting all of our passbook savings accounts to statement savings. The disclosures originally provided to existing accounts did not differentiate between passbook and statement accounts. Are we required to provide a 30-day change in terms notice to customers whose passbook accounts will be converted?
Answer: 

Not unless there is a change in any of the items in the account disclosure that is adverse to the customer. I do recommend, though, that you keep careful records of all the converted accounts, and if any passbook is handed in for a transaction or update, the book be prominently stamped to indicate the account was transferred to statement account ________ on [date]. My bank made the huge error of converting passbooks back in the early '80s and then allowing customers of an acquired bank continue to use their passbooks with memo posts after they were brought into the statement savings portfolio. We had all sorts of problems with passbooks being found in attics, followed by requests for updates or close-outs, with no reliable way to document that an account had been closed after conversion. We finally put out a mass mailing to customers to address the problem.

First published on 04/27/2015

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