(a) Misleading or inaccurate advertisements. An advertisement shall
not:
(1) Be misleading or inaccurate
or misrepresent a depository institution’s deposit contract; or
(2) Refer to or describe
an account as “free” or “no cost” (or contain a similar term) if any
maintenance or activity fee may be imposed on the account. The word
“profit” shall not be used in referring to interest paid on an account.
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(b) Permissible rates. If an advertisement states a rate of return, it shall state the
rate as an “annual percentage yield” using that term. (The abbreviation
“APY” may be used provided the term “annual percentage yield” is stated
at least once in the advertisement.) The advertisement shall not state
any other rate, except that the “interest rate,” using that term,
may be stated in conjunction with, but not more conspicuously than,
the annual percentage yield to which it relates.
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(c) When additional disclosures are required. Except as provided in paragraph (e) of this section, if the annual
percentage yield is stated in an advertisement, the advertisement
shall state the following information, to the extent applicable, clearly
and conspicuously:
(1) Variable
rates. For variable-rate accounts, a statement that the rate
may change after the account is opened.
(2) Time annual
percentage yield is offered. The period of time the annual percentage
yield will be offered, or a statement that the annual percentage yield
is accurate as of a specified date.
(3) Minimum balance. The minimum balance required to obtain the advertised annual percentage
yield. For tiered-rate accounts, the minimum balance required for
each tier shall be stated in close proximity and with equal prominence
to the applicable annual percentage yield.
(4) Minimum opening
deposit. The minimum deposit required to open the account, if
it is greater than the minimum balance necessary to obtain the advertised
annual percentage yield.
(5) Effect of fees. A statement that
fees could reduce the earnings on the account.
(6) Features
of time accounts. For time accounts:
(i) Time requirements. The term of the account.
(ii) Early withdrawal penalties. A statement
that a penalty will or may be imposed for early withdrawal.
(iii) Required interest payouts. For noncompounding
time 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.
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(d) Bonuses. Except as provided in paragraph
(e) of this section, if a bonus is stated in an advertisement, the
advertisement shall state the following information, to the extent
applicable, clearly and conspicuously:
(1) The “annual percentage yield,” using
that term;
(2) The time
requirement to obtain the bonus;
(3) The minimum balance required to obtain
the bonus;
(4) The
minimum balance required to open the account, if it is greater than
the minimum balance necessary to obtain the bonus; and
(5) When the bonus will be
provided.
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(e) Exemption
for certain advertisements.
(1) Certain media. If an advertisement is made through one of the following media,
it need not contain the information in paragraphs (c)(1), (c)(2),
(c)(4), (c)(5), (c)(6)(ii), (d)(4), and (d)(5) of this section:
(i) Broadcast or electronic media, such as television or radio;
(ii) Outdoor media,
such as billboards; or
(iii) Telephone response machines.
(2) Indoor signs.
(i) Signs inside the premises of a depository
institution (or the premises of a deposit broker) are not subject
to paragraphs (b), (c), (d) or (e)(1) of this section.
(ii) If a sign exempt by
paragraph (e)(2) of this section states a rate of return, it shall:
(A) State the rate as an “annual percentage yield,” using that term
or the term “APY.” The sign shall not state any other rate, except
that the interest rate may be stated in conjunction with the annual
percentage yield to which it relates.
(B) Contain a statement advising consumers
to contact an employee for further information about applicable fees
and terms.
(f) Additional disclosures in connection
with the payment of overdrafts. Institutions that promote the
payment of overdrafts in an advertisement shall include in the
advertisement the disclosures required by section 1030.11(b) of this
part.
