1030.3 General disclosure requirements. ii. The par value of a regular share in this Credit Union is $25. Do the account disclosures disclose all limitations on the number or dollar amount of withdrawals or deposits? (a) Misleading or inaccurate advertisements. The categories of transactions for which a fee for paying an overdraft may be imposed; The time period by which the member must repay or cover any overdraft; and. Dividend rates are prospective until actually declared; interest rates are set according to contract in advance and are earned on that basis. Do dividends begin to accrue not later than the business day specified for interest bearing accounts in section 606 of the Expedited Funds Availability Act? iv. 2. Account disclosures shall include the following, as applicable: (i) Annual percentage yield and dividend rate. No disclosures need be made to nonmembers, though a credit union may provide disclosures to nonmembers within its sole discretion. General. If a member closes an account between crediting periods and forfeits accrued dividends, the credit union may not show any figures for dividends earned or annual percentage yield earned for the period (other than zero, at the credit union's option). 4. v. Accounts of individuals operating businesses as sole proprietors. 6. iii. This disclosure is limited to federal credit unions with Bylaws containing this limitation. 1. For example, if a credit union offers an account on which it pays a 7% dividend rate, compounded daily, for the first three months (which, for example, contains 91 days), while the variable dividend rate that would have been in effect when the account was opened was 5%, the total dividends for a 365-day year for a $1,000 account balance is $56.52, (based on 91 days at 7% followed by 274 days at 5%). All information is self-explanatory. 4. A member who fails to complete payment of one share within __________ of his admission to membership, or within __________ from the increase in the par value in shares, or a member who reduces his share balance below the par value of one share and does not increase the balance to at least the par value of one share within __________ of the reduction may be terminated from membership at the end of a dividend period. For accounts earning dividends, other than term share accounts, a statement that dividends are paid from current income and available earnings, after required transfers to reserves at the end of a dividend period. The variable nature of a deposit account usually is based on an external index or is set at the discretion of the board. D. Resolved, that if the required transfers to reserves have been made and there are sufficient and available prior and/or current earnings available at the end of a dividend period, the officers of the Credit Union are authorized to pay dividends at the rate prospectively established by the Board of Directors for each account for the dividend period. In satisfying this requirement credit unions must specify the categories of transactions for which an overdraft fee may be imposed. A state law is inconsistent if it requires a credit union to make disclosures or take actions that contradict the requirements of the federal law. Or, earn a 5.25% APY for a three-year share certificate., (c) When Additional Disclosures are Required. Compliance with comment 8(a)10.v is not sufficient. A credit union using either the daily balance method or average daily balance method to calculate dividends that requires: (B) a $400 average daily balance to pay dividends on the account. Upon turning 21 years old, the The dollar amount of dividends earned year-to-date. [58 FR 50445, Sept. 27, 1993, as amended at 59 FR 59899, Nov. 21, 1994; 61 FR 114, Jan. 3, 1996; 64 FR 66356, Nov. 26, 1999; 66 FR 33163, June 21, 2001; 70 FR 72898, Dec. 8, 2005; 75 FR 47175, Aug. 5, 2010]. (2) For purposes of 707.8(a) and 707.11 of this part, the terms of, or a deposit in, a new or existing account. 2. CUNA Mutual Group 1993, 2003, 07, 08, 10 All Rights ReservedDPAGL4 ACCOUNT DISCLOSURES Credit unions comply with this paragraph if they disclose an interest rate (or dividend rate on a dividend-bearing term share account) and annual percentage yield accurate within the seven calendar days preceding the date they send the disclosures.
PDF Account Agreement & Truth-in-savings Disclosure The average daily balance is determined by adding the full amount of principal in the account for each day of the period and dividing that figure by the number of days in the period. If you close your regular share account before dividends are credited, you will not receive accrued dividends. 3. Any dividend rates stated must appear in conjunction with the annual percentage yields for each tier. 3. Minimum balances not affecting dividends. Part 707 applies to all credit unions that offer share and deposit accounts to residents (including resident aliens) of any state as defined in 707.2(v) and that offer accounts insurable by the National Credit Union Share Insurance Fund (NCUSIF) whether or not such accounts are insured by the NCUSIF. (1) If a credit union pays $1,268.25 in dividends for a 365-day year on $10,000 deposited into a regular share account earning 12%, and the dividends are compounded monthly, the APY will be 12.68%. Tiered-rate accounts. Renewal policies. The overdraft services covered by 707.11(b)(1) of this part do not include a service providing for the transfer of funds from another share account of the member to permit the payment of items without creating an overdraft, even if a fee is charged for the transfer. Evidence of required actions. Part II. General. Dividends will be compounded daily and will be credited quarterly. (c) Relation to Regulation E (12 CFR part 1005). The annual percentage yield (APY) for this tier ranged from ________% to ________%, depending on the balance in the account. The following fees may be assessed in connection with your accounts: Account reconciliation fee$____.00 per hour. 3. All dividend-bearing and interest-bearing accounts are either fixed-rate or variable-rate accounts. Or, using the simple formula above (since the term is deemed to be 365 days): (2) If a credit union pays $30.37 in dividends on a $1,000 six-month term share certificate account (where the six-month period used by the credit union contains 182 days), using the general formula above, the APY is 6.18%: APY = 100 [(1 + 30.37/1,000)(365/182) 1]. Examples of advertisements that would ordinarily be misleading, inaccurate, or misrepresent the deposit contract are: i. (additional disclosure requirements for institutions advertising the payment of overdrafts), the terms of, or a deposit in, a new or existing account. Overdraft transfers fee$____.00 per overdraft. (ii) Balance computation method. The terms share certificate, certificate account, or certificate may be used to describe share certificates and other dividend-bearing term share accounts. Credit unions may also choose to include a telephone number to call for interim information, if desired by a member. 1. ii. The annual percentage yield (APY) for this tier will range from ________% to ________%, depending on the balance in the account. 3. The credit union may not simply state, for instance, that the second balance is the members available balance, or contains available funds. Rather, the credit union should provide enough information to convey that the second balance includes these amounts. 8. They need not keep disclosures or other business records in hard copy. 4. 3. The balance may, but need not, include funds that are deposited in the member's account, such as from a check, that are not yet made available for withdrawal in accordance with the funds availability rules under part 229 of the title (Regulation CC). Insufficient funds. The sample forms illustrate the information that must be provided to a member when an account is opened, as required by 707.4(a)(1). 707.11(a)(2) of this part regarding communications about the payment of overdrafts that would not trigger periodic statement disclosures; ii. 2. The purpose of this part is to enable credit union members and potential members to make informed decisions about accounts at credit unions. Monthly Maintenance Fee $15 if none of the requirements are met No Monthly Maintenance Fee if you complete Part 707 of the NCUA Rules and Regulations implements the Truth in Savings Act of 1991 (TISA), contained in the Federal Deposit Insurance Corporation Improvement Act of 1991, 12 U.S.C. A credit union offers $25 to a member if the member can locate his name in the body of a newsletter. Displaying or offering newsletters at a credit union lobby, branch, or office. Credit unions shall calculate dividends by use of a daily rate of at least 1365 of the dividend rate. (e) Balance Computation Method ( 707.4(b)(3)(ii)). 1. 1. All other terms are incorporated by reference. Credit unions may advertise accounts as free for members that meet conditions not related to share accounts, such as the member's age.
eCFR :: 12 CFR Part 1030 -- Truth in Savings (Regulation DD) For interest-bearing accounts and dividend-bearing term share accounts, 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. This rule permits credit unions, on dividend-bearing share accounts, to report the annual percentage yield earned and the amount of dividends earned on a statement other than on each periodic statement when the dividend period does not agree with, varies from, or is different than, the statement period. Do account disclosures state the amount or type of bonus and the conditions under which the bonus will be paid? 1. 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 requirements 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, (e) Exemption for certain advertisements . 3. C. Resolved, that it is the policy and practice of the Board of Directors to meet periodically to establish prospective dividend rates for each type of dividend-bearing share account. Includes accounts in which the credit union does not contract to give at least 30 days advance written notice of decreases in the dividend rate. The NCUAs economists and analysts compile data on the credit union systems financial performance, merger activity, changes in credit union chartering and fields of membership, as well as broader economic trends affecting credit unions. If the credit union advertises tiered rate accounts, does the credit union state all of the APYs, including ranges where applicable, as well as the corresponding minimum balance requirements? The disclosures aid comparison shopping by informing consumers about the fees, annual percentage yield, interest rate, and other terms for deposit accounts. Provide a telephone number members may call to obtain current rate information? Credit unions are cautioned that merely providing fee information in an account disclosure may not be sufficient to gain the legal right to impose the fee involved under applicable law. (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. 22, 1994; 61 FR 114, Jan. 3, 1996; 63 FR 71575, Dec. 29, 1998], (a) Disclosure of total fees on periodic statements . Truth-in-Savings Disclosure. It is sufficient to state, as applicable: Whether your overdrafts will be paid is discretionary and we reserve the right not to pay. 3 * If your [daily balance/average daily balance] is $______ or less, the interest rate paid on the entire balance will be ______% with an APY of ______%. Additional disclosure requirements for overdraft services. ii. You will be paid this rate [for (time period)/until (date)/for at least 30 calendar days]. Examples. Similar disclosures are required of any state-chartered credit unions having similar limitations in their bylaws, or under state law. Truth in Savings Act (Reg DD) TISA was designed to enable consumers to make informed decisions about bank accounts. Note that if the credit union limits the maximum amount of shares which may be held by one member under NCUA Standard FCU Bylaws, Art. If dividends are not paid on amounts below a specified balance level, then the account has a minimum balance requirement (required to be disclosed under 707.4(b)(3)(i)), but the account does not constitute a tiered-rate account. 1. It established uniformity in the disclosure of . We [will/may] impose a penalty if you withdraw [any/all] of the [funds/principal] in your account before the maturity date. E. Term Share Accounts with a Stated Maturity Greater than One Year that Pay Dividends At Least Annually. The definition encompasses all irregularly scheduled and declared dividends, and as dividends, extraordinary dividends are exempt from the bonus disclosure requirements. Free for limited time. iii. For example, stating one month's dividends is permissible, whether the credit union assesses 30 days' dividends during the month of April, or selects a time period between 28 and 31 days for calculating the dividends for all early withdrawals regardless of when the penalty is assessed. 1. Codes of transactions are not required, but are a common credit union practice. Collected balance means the record of balance in a member's account reflecting collected funds, that is, cash or checks deposited in the credit union which have been presented for payment and for which payment has actually been received. vi. Such prospective dividend rate and prospective annual percentage yield may be disclosed either in lieu of, or in addition to, the dividend rate and annual percentage yield as of the last dividend declaration date. Definition of earned. Good faith compliance with this commentary affords protection from liability under section 271(f) of the Truth in Savings Act (TISA), 12 U.S.C. Fees for special services, such as stop payment fees, fees for balance inquiries or verification of share and deposits, fees associated with checks returned unpaid, fees for regularly sending to members share drafts that otherwise would be held by the credit union, and overdraft line of credit access fees (if charged against the share account). The requirement applies whether the credit union discloses a balance through an ATM owned or operated by the credit union or through an ATM not owned or operated by the credit union, including an ATM operated by an entity that is not a financial institution. A credit union transfers funds from an account to open a new account not at the member's request, unless the credit union previously gave account disclosures and any change-in-terms notices for the new account (e.g., funds in a money market share account are transferred by a credit union to open a new account for the member, such as a share draft account, because the member exceeded transaction limitations on the money market share account). [Average daily balance of $1,500 for the month, daily compounding.]. A financial institution may include additional information and may combine disclosures required by other laws (such as the Truth in Lending Act (15 U.S.C. (3) Format requirements. Since account opening disclosures may be provided to potential members requesting account information before opening an account, and members opening new accounts, information is provided indicating that the rate may not be current, but that the potential member or member may call the credit union to obtain up-to-date information. 1. For example, the credit union could state that overdraft funds are not available for ATM and one-time (or everyday) debit card transactions. Certificates of indebtedness. I also agree to be bound to the terms and conditions of any account that I have in the Credit Union now or in the future. Additional amounts are not available for all transactions (if applicable)? the Truth in Savings disclosures that explain the account terms, as well as to a bank's advertisements,3 brochures, and promotional materials on its Web . This web site is designed for the current versions of If these procedures include verification measures, such as an application process, verification telephone call or letter to an employer or association within the field of membership, witnessing by an existing member, or similar procedure, then the credit union may first verify the membership eligibility of a potential member before providing account disclosures or other information to the potential member. If the change is initiated by the member, the account opening disclosure requirements of 707.4(b) apply. Permissible rounding. It is not an official legal edition of the CFR. If it renews automatically, if a grace period exists and the length? Similarly, if funds are not available for all transactions pursuant to a service subject to Regulation Z (12 CFR part 1026) or a service that transfers funds from another account, a second balance that includes such funds should also indicate this fact. 4. e. Overdrafts/Returned Items$5.00 per draft. [As of [the last dividend declaration date/ (date)], the dividend rate was ______% with an annual percentage yield (APY) of ______% on your account. TRUTH-IN-SAVINGS DISCLOSURE Except as specifically described, the following disclosures apply to all of the accounts. The minimum balance required to earn the advertised annual percentage yield. 1. Services offered through a group purchasing plan or a credit union service organization (CUSO). contact the publishing agency. Relation to Regulation E. Disclosure of fees in compliance with Regulation E complies with this section for fees related to electronic fund transfers (for example, totaling all electronic funds transfer fees in a single figure). (c) Disclosure of account balances. General. This account is subject to all terms and conditions stated in the Term Share Certificate Account Disclosures, as they may be amended from time to time, and incorporates the same by reference into this agreement. Credit unions are required to have disclosures reflect the terms of the legal obligation between the credit union and a member at the time the member opens the account. Balance is the average daily balance in the account for the period. Prospective Annual Percentage Yield ______%. (See commentary to 707.3(d)). Is the annual percentage yield earned, using that term, disclosed on the periodic statement? National Credit Union Administration, a United States Government Agency. For a tiered-rate account, it also provides the upper and lower dollar amounts of the tier corresponding to the advertised annual percentage yield. Do disclosures for variable-rate accounts include the following: The fact that the interest rate and APY may change? The clauses shown relate only to the specific transactions described. Callable term share accounts. The par value of a regular share in this Credit Union is $5. Maintaining evidence of compliance (for a period of two years) with all provisions of Part 707. Review the credit union's TISA policies and procedures. You can learn more about the process 9. The disclosures under 707.11(a) must be included on periodic statements provided by a credit union starting with the first statement period that begins after January 1, 2010. 7. The word profit must not be used in referring to dividends or interest paid on an account. (e) Oral responses to inquiries. Accrued but uncredited dividends. A date that is easily discernible, such as the Tuesday prior to the maturity date stated on the notice or as of the maturity date stated on this notice. Truth in Savings Act and its implementing regulations. The dividend rate does not reflect compounding. An exhaustive list of transactions is not required. Disclosures need be made only as appropriate. In Tiering Method A accounts, the credit union pays the applicable tiered dividends rate on the entire amount in the account. As noted in the supplementary information to 707.2(j), dividend declaration date, the dividend period and actual dividend distribution date may vary. This illustration is for use of an FCU. iii. General. The dividend period may be different for each type of account. Retained sample disclosures for each type of account offered to members, such as account-opening disclosures, copies of advertisements, and change-in-term notices; and information regarding the dividend rates and annual percentage yields offered. . 16. State-chartered credit unions with interest-bearing deposit accounts. (i) The following resolution may be used where the dividend rates are set after the close of a dividend period. In an advertisement stating that rates for an account may vary depending on the amount of the initial deposit or the term of a term share account, credit unions need not list each balance level and term offered. The credit union allocates and transfers funds between the two subaccounts in order to maximize the balance in the share savings account while complying with the monthly limitations on transfers out of savings accounts under the Federal Reserve Board's Regulation D, 12 CFR 204.2(d)(2). Bylaw Requirements. General. 7. Only members who receive periodic statements (provided regularly at least four times per year) and who hold accounts of the type offered by the credit union as of the compliance date of part 707 (generally January 1, 1995) must receive the notice. Also the Board strongly recommends that such terms are included in account opening disclosures to inform the membership and to clearly set forth the legal relationship between the members and their credit union. This schedule is incorporated as part of your account agreement with the __________ Federal Credit Union. Leap year. Such benefits are not bonuses because they are sporadic in nature, often difficult to value, and providing non-dividend membership benefits is a long-standing unique credit union practice.
Truth in Savings Act - Wikipedia For account disclosures, the dividend rate may be expressed to more than two decimal places. Background Regulation DD, which implements the Truth in Savings Act (TISA) (12 USC 4301 et seq. Compounding and crediting. But a credit union could offer a minimum balance to earn dividends that includes an additional method that is unequivocally beneficial to the member such as the following: i. If the credit union states the dividend rate, using that term, in conjunction with the APY, is it not more conspicuous than the APY? Aggregation. Because the benefit accrues to a third party, such life savings plans offered are not bonuses. For tiered-rate accounts, a disclosure may be added about the currency of the rate, as is provided in the first set of brackets. Tiering Method B pays different stated dividend rates corresponding to applicable account balance tiers, on the applicable balance in each tier of the account. Please review the implementation and guidance materials available on our website, including regulations and official interpretation, before submitting a question about the Bureaus rules or regulations. 3 * If your [daily balance/average daily balance] is $________ or less, the dividend rate paid on the entire balance will be ________%, with an annual percentage yield (APY) of ________%. [59 FR 59899, Nov. 21, 1994, as amended at 60 FR 21699, May 3, 1995; 61 FR 68129, Dec. 27, 1996; 63 FR 71575, Dec. 29, 1998; 66 FR 33163, June 21, 2001; 70 FR 72899, Dec. 8, 2005; 72 FR 30246, May 31, 2007; 74 FR 36105, July 22, 2009; 75 FR 47175, Aug. 5, 2010; 77 FR 71085, Nov. 29, 2012; 85 FR 62212, Oct. 2, 2020]. For purposes of 707.8(b) of this part through 707.8(e) of this part, information given to members about existing accounts, such as current rates recorded on a voice-response machine or notices for automatically renewable time account sent before renewal. For example, if no dividends are earned for a statement period, credit unions need not state that fact. 5. III, section 5(a). 1. No Minimum balance requirements apply to this account. For example, if a member deposits $8,000, the credit union pays 5.25% on only $2,500 and 5.50% on $5,500 (the difference between $8,000 and the first tier cutoff of $2,500). Please call (credit union telephone number) to obtain current rate information.] The advertising rules do not cover an oral response to a question about rates. iii. Principal is the amount of funds assumed to have been deposited at the beginning of the account. It was part of the larger Federal Deposit Insurance Corporation Improvement Act of 1991 and is implemented by Regulation DD. For purposes of this paragraph (b)(4), an indoor sign does not include an ATM screen. Bonus. The average daily balance is calculated by adding the balance in the account for each day of the period and dividing that figure by the number of days in the period. The dividend period of the Credit Union on this type of account is annual, beginning on the date the account is opened, and ending on the stated maturity date, unless renewed. Monthly maintenance and excess-activity fees. 2. Limits on the number of share drafts or checks that may be written on an account for a given time period. vi. This part, known as Regulation DD, is issued by the Bureau of Consumer Financial Protection to implement the Truth in Savings Act of 1991 (the act), contained in the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. Average daily balance accounts. vi. The annual percentage yield earned (using the formula above) is 6.58%: APY Earned = 100 [(1 + 5.25/1,000)(365/30)1]. The credit union that computes dividends in this manner must provide a range that shows the lowest and the highest annual percentage yields for each tier (other than for the first tier, which, like the tiers in Method A, has the same annual percentage yield throughout). (See comment 707.7(b), which does not require credit unions to compound or credit dividends at any particular frequency). 1. 1. 7. Credit unions must pay dividends on funds in an account, even if inactivity or the infrequency of transactions would permit the credit union to consider the account to be inactive or dormant (or similar status) as defined by state or other law or the account contract. 1% over our current rate, so long as the rates are not determinable from the advertisement. The information is limited to information such as the account number, the type of account, balance information, accountholders' names, and social security or tax identification number; and. You will have a grace period of ________ [calendar/business] days after the maturity date to withdraw the funds in the account without being charged an early withdrawal penalty. The Credit Union reserves the right, at any time, to require members to give, in writing, not more than 60 days notice of intention to withdraw the whole or any part of the amounts so paid in by them. Subsequent account. Does the credit union calculate dividends on the full amount of principal in the account each day by use of either the daily balance method or the average daily balance method? Purchases of U.S. Savings Bonds through a credit union. A credit union offers $25 to a member with only a regular share account to open a share draft account. Fees for other products, such as safe deposit boxes. (i) Time requirements. Regulation E statements. Credit unions may use different methods or periods to calculate minimum balances for purposes of imposing a fee (the daily balance for a calendar month, for example) and accruing dividends (the average daily balance for a statement period, for example). Credit unions may disclose the dividend rate and annual percentage yield on accounts as of the last dividend declaration date. Note the special disclosures for term share certificate accounts, items nos. The dividend rate and annual percentage yield may change every (dividend period) as determined by the credit union board of directors. Dividends will begin to accrue on the business day you deposit noncash items (e.g., checks) to your account. Generally, prospective rates are rates set in good faith in advance of the close of a dividend period, that may be altered if sufficient funds are not available, or in the event of a superseding event, such as a strike, plant closure, significant fluctuation in market rates and/or a significant change in financial structure, natural disaster or emergency that alters the assumptions under which the prospective rates were made. 3. (u) Stepped-rate account means an account that has two or more dividend rates that take effect in succeeding periods and are known when the account is opened.
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