TISA / Reg. DD – Under TISA and Reg. DD, what are the maturity notice requirements for accounts that renew automatically?

Compliance > Regulation DD - TISA
Q:  Under TISA and Reg. DD, what are the maturity notice requirements for accounts that renew automatically?
 
A:     The Regulation outlines maturity notice requirements for auto renewing accounts.  For time accounts with a maturity of longer than 1 month an institution shall provide the disclosures noted below, at least 30 calendar days before maturity of the existing account.  As an alternative, disclosures may be provided at least 20 calendar days before the end of the grace period on the existing account, provided a grace period of at least 5 calendar days is allowed.
 
  • Maturities of longer than 1 year – Disclosures shall include the account disclosures set for in 1030.4(b) 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.
       
  • Maturities of 1 year or less but longer than 1 month – Disclosures shall include either:
     
    • The disclosures as set forth for accounts with maturities of longer than one year;
       
      Or
       
    • The date the existing account matures and the new maturity date if the account is renewed;
    • 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
    • Any difference in the terms of the new account as compared to the terms required to be disclosed under §1030.4(b) of this part for the existing account.
 
ADDITIONAL INFORMATION
 

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