Examiner Finds 'Unknown' Reg DD Violation

Answered by:

Question:

We currently have an examiner who found a violation of Reg DD because: 1) the variable rate disclosures do not include a "box" with the variable rate change limitations when there are none. He said it must be included and the limitations must be identified; 2)all fees (not just account specific), including OD, transfers, stop pays, etc', must be on the Reg DD disclosure. Providing them on a separate document is not acceptable. I know they are the examiners, but are they right? I've never seen this before.

Answer:

I have been a careful follower of Regulation DD since its conception (that's right, before it was effective). The regulation has always included two significant words in connection with disclosure requirements: "as applicable." In fact, Comment 4(b)(1)(ii)(D) specifically says "Institutions need not disclose the absence of limitations on rate changes." As for the use of separate documents, Comment 3(a)-1 makes it clear that more than one document can be used to complete the disclosures, as long as they are delivered to the consumer at the same time.

I suggest that you provide this information to the examiner. If he or she persists in citing a violation, you should ask the examiner to cite where the plain language of the Official Staff Interpretations is officially superseded for you.

First published on BankersOnline.com 10/25/10