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TISA Disclosures Required for CD Automatic Renews

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Question: 
If we have a CD that automatically renews and the term is longer than one year, do we need to send the customer a new certificate and TISA disclosures?
Answer: 

Please see Regulation DD Sec. 1030.5(b)(1) on subsequent disclosures. This customer is entitled to a brand new "soup to nuts" disclosure under the regulation because the original maturity exceeded one year.

You are not required to give the customer a "certificate," either at account inception or maturity. Many banks have eliminated certificates and simply sell "book entry" time deposits where the customer gets a receipt at that time the deposit is made.

The "certificate" is an anachronism; it was never required. The pretty piece of paper on which the terms of the deposit were printed was intended to impress customers with the bank's strength and security and also to look good in comparison to the stock certificates that customers used to keep in their safe deposit boxes.

First published on 02/03/2014

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