Solving Common Violations

Reg DD: Truth in Savings

230.3(a): Form of disclosures

• Believe it or not, the form used to make disclosures is often non-compliant. Make it a practice to check your disclosures at least once a quarter.
• Be sure someone is responsible for managing the supply of disclosures so that you don't run out.
• Whoever manages the disclosures should manage all deposit new account disclosures. Changes in one set of disclosures can trigger problems in another.

230.4(b): Content of disclosures

• Check disclosures each quarter for content. Use the regulation as a checklist.
• Also be sure that you do what the disclosures say.

230.5(b)(1): Time account maturity notice

• Before maturity, the bank must send notices to owners of time accounts of more than one year. This notice must include the disclosures required by 230.4 - new account disclosures.
• Procedures are critical. Anyone sending renewal or maturity notices must know to enclose new account disclosures.
• Audit this process regularly.

230.6(a): Periodic statements

• Periodic statements must include information about the APYE, interest, fees imposed, and length of period.
• Watch for the computer types who like to change the statement format - and drop some of this required information.
• Put someone in deposit operations in charge of monitoring periodic statements.

230.8: Advertising

• Advertisements are Regulation DD's biggest area of violations. There is more to this than the trigger terms. Regulation DD requires that advertisements be accurate and not misleading.
• Remind anyone to do with marketing that misleading advertising was one of the key contributors to the passage of Truth in Savings. Creating misleading ads is simply asking for more trouble.
• Give marketing the trigger terms list. Also give them advice on ways to avoid using trigger terms - but still run a good ad.
• Check every ad - before it is placed - for trigger terms.
• Never ever forget to mention early withdrawal penalties if additional disclosures are triggered in ads for time accounts.
• Also remember that one of the triggered terms is the effect of fees (fees may reduce earnings).

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 6, 6/01