truth in Savings Act Presented by

Transcription

1 truth in Savings Act Presented by

2 Regulation Enacted in 1991 The Consumer Financial Protection Bureau (CFPB) implements regulations for all depository institutions except credit unions CFPB s regulation is known as Regulation DD

3 Regulation The NCUA s TISA Regulation is 12 CFR 707 and is nearly identical to Reg. DD. It s different because credit unions pay dividends!

4 Purpose Disclosure Law Enables members and potential member to make meaningful comparisons of deposit accounts

5 Purpose Disclosure requirements at five different points in the life cycle of a deposit account: 1. Pre-account opening 2. Account opening 3. Periodic statements 4. Changes in account terms and account maturity 5. Advertising

6 Covered Accounts Consumer: Share accounts Share draft or checking accounts Time deposits

7 Exempt Accounts Businesses Unincorporated nonbusiness associations Sole proprietorships Attorney-client trust accounts

8 Dividends vs. Interest Dividends are earnings due to members (owners) Interest is payment for use of the account

9 Required Terminology Dividend Rate Annual Percentage Yield (APY) Annual Percentage Yield Earned (APYE)

10 Permissible Account Terms Checking Account = Share Draft Money Market Account = Money Market Share Savings Account = Share Account Share Certificate = Certificate Account

11 Prohibited Account Terms Certificate of Deposit CD Time account Time deposit

12 Regarding Earnings Balance computation rules Dividend nonpayment rules Dividend accrual rules Compounding and crediting Minimum balance rules

13 Oral Disclosures Always quote the APY Dividend accounts: quote APY from last dividend declaration date or the prospective APY Term share accounts and interest- bearing accounts: quote an APY accurate within the last seven calendar days: State that the APY is accurate as of a specified date and Provide a telephone number for members to call to obtain current rate information

14 General Disclosure Rules Clearly, conspicuously, in writing, in a form the member may keep Paper or electronic May combine with other disclosures Point out which disclosures are applicable to the member s account Give to any account holder Round rates to the nearest.01% and disclose to two decimal places.

15 Account Opening Disclosures Before an account is opened or services are provided whether in person or online Once is enough, if disclosures are still current Mail within 10 business days after account opening if not opened in person Provide upon request

16 Disclosure Content Rate Information Compounding and Crediting Balance Information Fees Transaction Limitations Nature of Dividends Term Share Account Features Bonuses

17 Periodic Statements Not Required!! Can be electronic/ follow ESIGN rules

18 Periodic Statements Annual Percentage Yield Earned Dividends/Interest Earned Fees Imposed Number of Days in the period Optional Information

19 Overdrafts Account Opening Disclosures Advertising Disclosures Periodic Statement Disclosures

20 Term Share Maturity Notices Maturities > 1 month, deliver notice at least 30 calendar days before maturity or 20 calendar days prior to the end of a fiveday grace period. Rollover accounts with maturity > 1 year: The date the existing account matures The full account disclosures applicable Rate or number for rate information

21 Term Share Maturity Notices Rollover accounts with a maturity > 1 month, < 1 year, give full account disclosures or just the following: Existing maturity date New maturity date Rate or number to call for rate Any differences

22 Term Share Maturity Notices Non-rollover Term Share Accounts: Maturity > than 1 year, give maturity notice Mail or deliver the notice at least ten calendar days before maturity State the maturity date and whether dividend/interest will be paid after maturity. For non-rollover accounts with maturity < than 1 year, no maturity notice is required.

23 Change in Terms Any change in initial TISA account disclosures Adverse impact only Mail or Deliver notice at least 30 calendar days before the effective date of the change: In writing in a form the member can keep Describe the change Effective date of the change Periodic statement or in another mailing

24 Advertising Commercial message In any medium Promotes deposit accounts

25 Advertisements Trigger Terms: APY Bonuses