Trouble Spots in Deposit Regulations

Reports of violations from consumer compliance examinations can provide insight into the troublesome areas of deposit regulations. Recent summaries of FDIC's 1995 examination findings identify the most troublesome areas of Truth in Savings.

Disclosures
Providing initial account disclosures (230.4(b)) was the most commonviolation of Regulation DD that was identified in FDIC's compliance examinations. Examiners found this violation in eighteen percent of the banks examined.

The second trouble spot was disclosures provided upon maturity or renewal of a time deposit for longer than one year. 230.5(b)(1) Examinations revealed this violation in fourteen percent of the banks examined.

Advertisements
Advertisements for accounts appear to be another compliance problem. Fifteen percent of the banks examined were found to violate 230.8(c)'s requirement for additional disclosures when triggering terms are used in an advertisement. Violations of rate disclosures in advertisements (230.8(b)) were reported in eleven percent of the banks examined.

Regulation CC
Regulation CC presents different problems for banks. Compliance problems with Expedited Funds related to correct identification of situations subject to holds, placement of holds, and notifications to the customer. Particular problems include the next day availability rule (229.10(c)(1)(vii)). Eighteen percent of the banks examined in 1995 were cited for this violation.

Providing notices of exception holds was the second most common compliance problem. Violations of 229.13(g) were cited for fifteen percent of the banks examined.

Finally, under Expedited funds, complying with requirements for availability of local checks (229.12(b)) was found to be a problem in ten percent of the banks examined.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 9, 6/96