Answer:
Yes. Regulation DD requires that you disclose fees "in connection with the account" (such as stop payments) in the initial disclosure on consumer accounts. It also requires that if you wish to change anything that you were required to disclose in the initial disclosure that you provide advance notification if the change is detrimental to the customer.If you are changing a single fee, probably the least expensive way to do so is to use statement messages or statement stuffers. Establish the effective date of the change as 30 days from the last statement cycle that includes the notice.
If you are changing several fees, it might be easier to send an updated fee schedule. However, you must draw attention to those fees that are changing.
The "daily overdraft fee" deserves broader discussion, but the answer would still be, "Yes, advance notice is required."
From the regulation:
12 CFR 230.4(b)(4) Fees. The amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed.
12 CFR 230.5(a) Change in terms(1) Advance notice required. A depository institution shall give advance notice to affected consumers of any change in a term required to be disclosed under Sec. 230.4(b) of this part if the change may reduce the annual percentage yield or adversely affect the consumer. The notice shall include the effective date of the change. The notice shall be mailed or delivered at least 30 calendar days before the effective date of the change.
First published on BankersOnline.com 2/10/03
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