We have been given a proposal from CETO for deposit reclassification and they indicate they will give us sample disclosures that need to be given to existing customers as well as built into our new account disclosures. However, when we checked with another bank about their deposit reclassification program, they said they did not give disclosure to their customers because it was not negative to the customer. Any thoughts or advice on disclosures?

Then the other bank has really blown it. Without disclosing the change of terms to the customers - how did they reserve the 7 day notice of withdrawal on the savings sub-account? If they failed to do this properly they could subject themselves to back reserves and penalties since the inception of the program. Listen to CETO - they have been doing this for a long time. The bank I worked at dealt with them 5-6 years ago and they know all the ins and outs.

I worked with CETO in '97 or '98 on a deposit reclass project; they did a great job and provided the necessary guidance / example disclosures.

They also go through the no-objection process from the Fed, which I have always felt was a good thing. They provide the Fed with copies of the customer disclosures, etc. Many banks bypass this step and really close the door on any defense if criticized at a later date.