The Truth in Savings Act (Regulation DD) plays a crucial role in helping consumers make informed decisions about their deposit accounts and deposit-related services. For example, it requires a financial institution to provide account disclosures before an account is opened. These disclosures provide a wide variety of information about the account, for instance, whether the account earns interest, any minimum balance requirements, transaction limitations, fees, just to name a few. It also requires certain information to be provided on periodic statements, how a change in account terms is to be handled, etc.
One area that we consistently see issues with is fee terminology. The Commentary to 1030.3(a) #2 states Institutions must use consistent terminology to describe terms or features required to be disclosed. For example, if an institution describes a monthly fee (regardless of account activity) as a “monthly service fee” in account-opening disclosures, the periodic statement and change-in-term notices must use the same terminology so that consumers can readily identify the fee. In other words, if you call something a “monthly service fee” in your account-opening disclosures, it should not be called a “service charge” on the periodic statement.
It's a good idea to monitor your fee terminology from time to time, especially after a system or software update.
Kevin explains more in the video.
Published
2024/02/15
