(a) Delivery of account disclosures.
(1) Account opening.
(i) General. A depository institution shall provide account disclosures to a
consumer before an account is opened or a service is provided, whichever
is earlier. An institution is deemed to have provided a service when
a fee required to be disclosed is assessed. Except as provided in
paragraph (a)(1)(ii) of this section, if the consumer is not present
at the institution when the account is opened or the service is provided
and has not already received the disclosures, the institution shall
mail or deliver the disclosures no later than 10 business days after
the account is opened or the service is provided, whichever is earlier.
(ii) Timing of electronic disclosures. If a
consumer who is not present at the institution uses electronic means
(for example, an Internet Web site) to open an account or request
a service, the disclosures required under paragraph (a)(1) of this
section must be provided before the account is opened or the service
is provided.
(2) Requests.
(i) A depository
institution shall provide account disclosures to a consumer upon request.
If a consumer who is not present at the institution makes a request,
the institution shall mail or deliver the disclosures within a reasonable
time after it receives the request and may provide the disclosures
in paper form, or electronically if the consumer agrees.
(ii) In providing disclosures
upon request, the institution may:
(A) Specify an interest rate
and annual percentage yield that were offered within the most recent
seven calendar days; state that the rate and yield are accurate as
of an identified date; and provide a telephone number consumers may
call to obtain current rate information.
(B) State the maturity of a time account as
a term rather than a date.
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(b) Content of account disclosures. Account disclosures shall include the following, as applicable:
(1) Rate information.
(i) Annual
percentage yield and interest rate. The “annual percentage yield”
and the “interest rate,” using those terms, and for fixed-rate accounts
the period of time the interest rate will be in effect.
(ii) Variable rates. For variable-rate accounts:
(A) The fact that
the interest rate and annual percentage yield may change;
(B) How the interest rate is
determined;
(C) The frequency
with which the interest rate may change; and
(D) Any limitation on the amount the interest
rate may change.
(2) Compounding
and crediting.
(i) Frequency. The frequency with which interest is compounded and credited.
(ii) Effect of closing an account. If consumers
will forfeit interest if they close the account before accrued interest
is credited, a statement that interest will not be paid in such cases.
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(3) Balance information.
(i) Minimum
balance requirements.
(A) Any minimum balance required
to:
(1) Open the account;
(2) Avoid the imposition
of a fee; or
(3) Obtain the annual percentage yield disclosed.
(B) Except for the balance to
open the account, the disclosure shall state how the balance is determined
for these purposes.
(ii) Balance
computation method. An explanation of the balance computation
method specified in section 1030.7 of this part used to calculate
interest on the account.
(iii) When
interest begins to accrue. A statement of when interest begins
to accrue on noncash deposits.
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(4) Fees. The amount of any fee that may be imposed in connection with the
account (or an explanation of how the fee will be determined) and
the conditions under which the fee may be imposed.
(5) Transaction
limitations. Any limitations on the number or dollar amount of
withdrawals or deposits.
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(6) Features
of time accounts. For time accounts:
(i) Time requirements. The maturity date.
(ii) Early withdrawal penalties. A statement
that a penalty will or may be imposed for early withdrawal, how it
is calculated, and the conditions for its assessment.
(iii) Withdrawal
of interest prior to maturity. If compounding occurs during the
term and interest may be withdrawn prior to maturity, a statement
that the annual percentage yield assumes interest remains on deposit
until maturity and that a withdrawal will reduce earnings. For accounts
with a stated maturity greater than one year that do not compound
interest on an annual or more frequent basis, that require interest
payouts at least annually, and that disclose an APY determined in
accordance with section E of Appendix A of this part, a statement
that interest cannot remain on deposit and that payout of interest
is mandatory.
(iv) Renewal policies. A statement of whether
or not the account will renew automatically at maturity. If it will,
a statement of whether or not a grace period will be provided and,
if so, the length of that period must be stated. If the account will
not renew automatically, a statement of whether interest will be paid
after maturity if the consumer does not renew the account must be
stated.
(7) Bonuses. The amount or type of
any bonus, when the bonus will be provided, and any minimum balance
and time requirements to obtain the bonus.
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(c) Notice to existing account holders.
(1) Notice of availability of disclosures. Depository institutions
shall provide a notice to consumers who receive periodic statements
and who hold existing accounts of the type offered by the institution
on June 21, 1993. The notice shall be included on or with the first
periodic statement sent on or after June 21, 1993 (or on or with the
first periodic statement for a statement cycle beginning on or after
that date). The notice shall state that consumers may request account
disclosures containing terms, fees, and rate information for their
account. In responding to such a request, institutions shall provide
disclosures in accordance with paragraph (a)(2) of this section.
(2) Alternative to notice. As an alternative
to the notice described in paragraph (c)(1) of this section, institutions
may provide account disclosures to consumers. The disclosures may
be provided either with a periodic statement or separately, but must
be sent no later than when the periodic statement described in paragraph
(c)(1) is sent.
