7 Day Notice of Withdrawal Language

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Question:

During a recent compliance forum I understood the consultant to say that the 7 day notice of withdrawal language needed to be a part of the TISA disclosure – even if it is part of the terms and conditions disclosure. It is not at our bank. I spoke with a bank manager that has a background in compliance but has been out of the deposit compliance loop for several years. He says that as long as it was in our T&C then we should be fine. I can’t get what the consultant said out of my head – can you help? Is there a citation that addresses this in Reg DD or Reg D? Maybe I misunderstood?

Answer:

The commentary to 1030.4(b)(5) notes that the reservation of the right to require notice for withdrawals does not have to be part of the Truth-in-Savings disclosure.

(b)(5) Transaction limitations.

1. General rule. Examples of limitations on the number or dollar amount of deposits or withdrawals that institutions must disclose are:

i. Limits on the number of checks that may be written on an account within a given time period.

ii. Limits on withdrawals or deposits during the term of a time account.

iii. Limitations required by Regulation D of the Board of Governors of the Federal Reserve System (12 CFR part 204) on the number of withdrawals permitted from money market deposit accounts by check to third parties each month. Institutions need not disclose reservations of right to require notices for withdrawals from accounts required by federal or state law.
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