Periodic Statement Exception, Transfers, and ATM Transactions

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Question:

Does the periodic statement exception <a href="http://www.bankersonline.com/regs/205/2059.html">205.9(c)(1)(i)</a> for passbook accounts apply to telephone banking transfers or to ATM activity on a passbook savings account? We are adding ATM access and Telephone banking and were wondering if the passbooks were exempt from the periodic statement requirement. If not, it would probably be easier for us to only offer these services with a statement savings account.

Answer:

The exception only applies to preauthorized transfers to an account. These include direct deposit of payroll, social security or other recurring credits only.

If the account can be accessed by preauthorized transfers from the accountmonthly insurance or membership charges for example or by ATM debits or credits or telephone transfers (none of which fits the "preauthorized transfers to" description), you must deliver or make a statement available.

ATM and telephone banking access to these accounts pretty much kills their viability as passbook accounts.

First published on BankersOnline.com 6/3/02