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Reg D Restrict Access Device- 21 Day Notice?

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Question: 
When a bank restricts the use of a customer's access device due to excessive transactions under Reg D, does it have to send the Reg E 21-day change in terms notice?
Answer: 

Your existing agreement should already restrict transactions that will count as limited, meaning this isn't a change. If that is not the case, I recommend changing the deposit product to one which is not limited under the terms of your agreement, and send the new disclosures. To leave the account as is, and have to provide an advance notice, is inviting more transactions when an account has already reached your "3-strike" rule limit.

If your account is restricted as to the number of transactions, and you have not advised the consumer of such restrictions, you have an immediate issue to correct there. I can see a UDAAP argument for a higher rate of interest and issuance of a debit card that is not restricted, nor is the consumer advised of such restrictions, yet they are imposed after the account is functional.

First published on BankersOnline.com 4/15/13.

First published on 04/15/2013

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