Compliance Alliance Q&A 5/26/2020

Q: Given the current rate environment, the bank is looking at slightly decreasing our money market account rates. In our original disclosures for these accounts, we disclosed the rate as variable, subject to change at our discretion at any time. For this change, is there an advance notice requirement or would it be acceptable to just include a notice about the rate change on the next periodic statement?

 

A: A 30-day advance notice is not explicitly required by TISA in this situation, as set out here: 

(2) No notice required. No notice under this section is required for:
(i) Variable-rate changes. Changes in the interest rate and corresponding changes in the annual percentage yield in variable-rate accounts.
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1030/5/#a-2

Like you imply, though, it's still a good practice to give some kind of advance notice of the change, and including a statement message is a common way to accomplish this. 

 

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