Truth In Savings Act: Fee Terminology Requirements

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.

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Kevin Edwards

Kevin brings years of experience and a unique perspective on regulatory matters to our clients. A self-proclaimed geek and accredited CRCM, Kevin is also a recovering attorney with experience as in-house counsel for a large regional bank and one of the leading national title insurance providers. For reasons unknown, Kevin decided to leave the safety and serenity of his desk job to seek fortune and glory as a wandering adventurer. Like a bank compliance version of Kwai Chang Caine, The Man with No Name or Don Quixote, he now travels the land seeking to help those in need and righting compliance wrongs, wherever he may find them. Kevin lives in Sioux Falls with his two children, who are surprisingly normal after having endured their father’s vivid imagination for their entire lives. He won’t admit to having any hobbies, because apparently “Regulations never sleep.” (While he does say this in his Batman voice, we’re pretty sure he’s joking.) From the looks of his Facebook page, he likes the outdoors and spending time with his large extended family (who seem like relatively normal people).

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