Passbook Savings - Rate Decrease Notification

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Question:

Do we have to provide notice in writing to customers who possess passbook savings accounts, that their rate will be decreasing as of a certain date?

Answer:

That depends upon the initial disclosures provided in connection with the account. Look at the definition of "Variable Rate" in Regulation DD, at Section 230.2(v) to determine whether your accounts qualify as variable-rate accounts or not. If they are variable-rate accounts, you don't have to provide advance notice of a rate reduction. If they are not variable-rate, you'll have to provide at least thirty days' advance notice of the change in rate.

First published on BankersOnline.com 10/26/09