(a) Change in terms.
(1) Advance notice
required. A depository institution shall give advance notice
to affected consumers of any change in a term required to be disclosed
under section 1030.4(b) of this part if the change may reduce the
annual percentage yield or adversely affect the consumer. The notice
shall include the effective date of the change. The notice shall be
mailed or delivered at least 30 calendar days before the effective
date of the change.
(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.
(ii) Check printing fees. Changes in fees assessed
for check printing.
(iii) Short-term time accounts. Changes
in any term for time accounts with maturities of one month or less.
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(b) Notice
before maturity for time accounts longer than one month that renew
automatically. For time accounts with a maturity longer than
one month that renew automatically at maturity, institutions shall
provide the disclosures described below before maturity. The disclosures
shall be mailed or delivered at least 30 calendar days before maturity
of the existing account. Alternatively, the disclosures may be mailed
or delivered at least 20 calendar days before the end of the grace
period on the existing account, provided a grace period of at least
five calendar days is allowed.
(1) Maturities
of longer than one year. If the maturity is longer than one year,
the institution shall provide account disclosures set forth in section
1030.4(b) of this part for the new account, along with the date the
existing account matures. If the interest rate and annual percentage
yield that will be paid for the new account are unknown when disclosures
are provided, the institution shall state that those rates have not
yet been determined, the date when they will be determined, and a
telephone number consumers may call to obtain the interest rate and
the annual percentage yield that will be paid for the new account.
(2) Maturities of one year or less but longer than one month. If
the maturity is one year or less but longer than one month, the institution
shall either:
(i) Provide disclosures as set forth
in paragraph (b)(1) of this section; or
(ii) Disclose to the consumer:
(A) The date the
existing account matures and the new maturity date if the account
is renewed;
(B) The interest
rate and the annual percentage yield for the new account if they are
known (or that those rates have not yet been determined, the date
when they will be determined, and a telephone number the consumer
may call to obtain the interest rate and the annual percentage yield
that will be paid for the new account); and
(C) Any difference in the terms of the new
account as compared to the terms required to be disclosed under section
1030.4(b) of this part for the existing account.
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(c) Notice before maturity for time accounts longer
than one year that do not renew automatically. For time accounts
with a maturity longer than one year that do not renew automatically
at maturity, institutions shall disclose to consumers the maturity
date and whether interest will be paid after maturity. The disclosures
shall be mailed or delivered at least 10 calendar days before maturity
of the existing account.
