Regulation DD: Changes to Lobby Signs and Disclosures

In the compliance scheme of things, Regulation DD is a relatively young regulation and the FRB is still working out some of the kinks. In its recent spate of compliance rulemaking, the FRB provided solutions to several of these nagging problems.

These changes carry out the amendments to the Truth in Savings Act contained in EGRPRA (The Economic Growth and Regulatory Paperwork Reduction Act of 1996).

EGRPRA contained a resolution for the lobby sign problem and the revisions to DD make it official. All indoor signs - even if they can be seen from outside the bank - are exempt from certain advertising disclosures. This includes a sign that is stationed inside the bank lobby but designed to be seen from the outside.

However, be careful with signs. The new permission does not apply to any signs actually located outside of the bank. Make sure the marketing people are aware of this distinction.

The revisions also resolve problems with renewal notices for accounts for one month or less that renew automatically. First, "month" is defined to include 31 days. Thus, accounts with 31-day maturities can be treated the same way as accounts with 30-day maturities.

In addition, the act itself now supports the position taken by the FRB that renewal disclosures are not required for accounts with maturities of one month or less.

And perhaps the best news is that civil liability for TISA violations will disappear as of September 30, 2001 (assuming you have made it through that far into the next century). The regulation now refers to the statutory limit on civil liability.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3, No. 13 & 14, 10/98