[Mary Beth Devillier]

We have incorporated some new savings products with tier interest rates and I wanted to know if the wording under: Example of effect of interest rate increase on the consumer disclosure statement showing an increase example of 0.250% is compliant and/or reasonable for the consumer disclosure statement.

Topic

[Barbara Boccia]

Under Truth in Savings Regulation DD, advance notice is required for any change that may negatively impact a customer, such as the Annual Percentage Yield (APY) going down, and the change-in-terms information must be provided at least 30 days in advance. (Section 1030.5 Subsequent Disclosures https://www.consumerfinance.gov/rules-policy/regulations/1030/5/)

While a formal change-in-terms is not required for a rate increase (which positively impacts a customer,) it is customary to let the consumer know the same type of information – including the type/name of accounts impacted, the rate change from and to, and the effective date. Simply stating “by 0.250%” without specific data may be confusing or misleading, depending upon the context, so you don’t want to run into any concerns under Unfair, Deceptive or Abusive Acts or Practices (UDAAP).

For example,
The rate on our XXZ Savings Account will be adjusted from 3.75% to 4.00% Annual Percentage Yield (APY), effective 5/01/25.

• This reply was modified 3 months ago by Brent V.

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