Question & Answer

Question: In a recent issue, you explained that one of the most common violations to Regulation DD was to fail to include complete information with renewals of time accounts. Your response did not distinguish between time accounts for greater than one year and for less than one year. My understanding is that for accounts that mature in less than one year, the additional 230.4(b) disclosures are not required.

Answer: You are correct. The "new account" disclosures of 230.4(b) are required in the maturity notices for accounts that have maturities of greater than one year. The renewal notices for time accounts with shorter maturities do not need to include the new account disclosures. The regulation presumes that the consumers can remember the terms of shorter-life products, or still have their initial disclosures.

Of course, there is no harm in providing extra information. If you have concerns about instructing staff on the distinction between types of time accounts, the safest route to take is to always include the 230.4(b) disclosures.

Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 12 & 13, 10/97