Our deposit account vendor told us a slight APY error is no problem – are they right?

Answered by:

Question:

We have noticed that the APY is wrong on some of our Truth in Savings disclosures, but only by .03%. The APY is calculated by our document software vendor, and they told us not to worry about it, because Reg DD has a +/- .05% tolerance allowance. Is this true?

Answer:

Yes and no. Reg DD does have a provision at 1030.(f)(2) that says the APY will “be considered accurate if not more than .05% above or below the calculated APY.” Your vendor is correct in that regard. HOWEVER, that is not the end of it. The Commentary goes on to clearly state that this tolerance is “designed to accommodate inadvertent errors. Institutions may not purposefully incorporate the tolerance into their calculation of yields.” Respectfully tell your vendor they are wrong, and to step up and fix the issue.

Obtain all the facts to keep your shop in good shape, by joining upcoming webinar “Yikes! The APR or APY is WRONG…Now What?!” on May 18, 2023!

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Learn more about Rebekah Leonard’s, Yikes! The APR or APY is WRONG…Now What? webinar.