Q: Under TISA and Reg. DD, what types of changes require a change in terms notice?
A: A change in terms notice is required to be provided to affected consumers of any change in a term required to be disclosed under 1030.4(b) (i.e. the account disclosures) if the change may:
However, the Regulation (1030.5) specifically outlines that no change in terms notice is required for:
Variable rate changes – changes in the interest rate and corresponding changes in the APY in variable-rate accounts
Check printing fees – changes in fees assessed for check printing.
Short-term time accounts – changes in any term for time accounts with maturities of one month or less.
The Official Interpretations for 1030.5 also contains this further clarification regarding changes that occur upon an event that is already disclosed:
OFFICIAL INTERPRETATION OF SECTION
Section 1030.5--Subsequent Disclosures
(a) Change in terms.
3. Terms that change upon the occurrence of an event. An institution offering terms that will automatically change upon the occurrence of a stated event need not send an advance notice of the change provided the institution fully describes the conditions of the change in the account opening disclosures (and sends any change- in-term notices regardless of whether the changed term affects that consumer's account at that time).
4. Examples. Examples of changes not requiring an advance change-in-terms notice are:
i. The termination of employment for consumers for whom account maintenance or activity fees were waived during their employment by the depository institution.
ii. The expiration of one year in a promotion described in the account opening disclosures to “waive $4.00 monthly service charges for one year.”
ADDITIONAL INFORMATION –