F e d e r a l R e s e r v e B a n k OF DALLAS ROBERT D. MCTEER, JR. p r e s id e n t DALLAS TEXAS ANP CHIEF EXECUTIVE OFFICER JUIle 30, 1994 7 5 2 6 5 -5 9 0 6 Notice 94-63 TO: The Chief Executive Officer of each financial institution in the Eleventh Federal Reserve District SUBJECT Revised Pamphlets for Regulation DD (Truth in Savings), Regulation F (Limitations on Interbank Liabilities), and Regulation D (Reserve Requirements of Depository Institutions) DETAILS The Board of Governors of the Federal Reserve System revised Regulation DD, effective September 21, 1992, Regulation F, effective December 19, 1992, and Regulation D, effective December 22, 1992. Due to a limited supply, this Bank was unable to distribute the pamphlets earlier. We regret any inconvenience this may have caused. Amendments to Regulation DD were distributed in Notice 93-40 and in slip-sheet form in Notice 93-95. No amendments to Regulation F and Regulation D have been distributed. The amendments should be retained in your Regulations binder along with the revised pamphlet. ENCLOSURES The revised pamphlets are enclosed. For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library ([email protected]) - 2 - MORE INFORMATION For more information on Regulation DD, please contact Eugene Coy at (214) 922-6201. For more infor­ mation regarding Regulation F, please contact Jane Anne Schmoker at (214) 922-5101. For more information regarding Regulation D, please contact the Reserve and Risk Management Division at (214) 922-5646. For additional copies of this Bank’s notice or the pamphlets, please contact the Public Affairs Department at (214) 922-5254. Sincerely yours, Board of Governors of the Federal Reserve System Regulation DD Truth in Savings 12 CFR 230; effective September 21, 1992 Any inquiry relating to this regulation should be addressed to the District in which the inquiry arises. November 1992 Contents Page Page Section 230.1—Authority, purpose, Section 230.8—Advertising.............................. 6 coverage, and effect on state la w s .............1 (a) Misleading or inaccurate (a) Authority ............................................1 advertisements ...................................... 6 (b) Purpose.................................................1 (b) Permissible rates.................................... 6 (c) Coverage.............................................. 1 (c) When additional disclosures are (d) Effect on state laws............................. 1 required................................................... 6 Section 230.2—Definitions .............................. 1 (d) Bonuses................................................... 7 Section 230.3—General disclosure (e) Exemption for certain requirements................................................. 2 advertisements ...................................... 7 (a) F orm .......................................................2 Section 230.9—Enforcement and record (b) General...................................................2 retention......................................................... 7 (c) Relation to Regulation E .....................3 (a) Administrative enforcement...............7 (d) Multiple consumers..............................3 (b) Civil liability.......................................... 7 (e) Oral response to inquiries.....................3 (c) Record retention....................................7 (f) Rounding and accuracy rules for Appendix A—Annual-percentage- rates and y ield s....................................... 3 yield calculation.............................................7 Section 230.4— Account disclosures................3 Appendix B—Model clauses and sample (a) Delivery of account disclosures.......... 3 form s............................................................12 (b) Content of account disclosures.......... 3 Appendix C—Effect on state laws...............19 (c) Notice to existing account holders .. 4 Appendix D—Issuance of staff Section 230.5—Subsequent disclosures...........4 interpretations ...........................................19 (a) Change in term s.....................................4 (b) Notice before maturity for time accounts longer than one month TRUTH IN SAVINGS ACT that renew automatically......................5 Section (c) Notice for time accounts one 261 Short t it le ............................................... 21 month or less that renew 262 Findings and purpose............................21 automatically .......................... ............ 5 263 Disclosure of interest rates and (d) Notice before maturity for time terms of accounts..................................21 accounts longer than one year 264 Account schedule..................................22 that do not renew automatically . 5 265 Disclosures requirements for Section 230.6—Periodic-statement certain accounts....................................23 disclosures........................................................5 266 Distribution of schedules..................... 23 (a) General rule .......................................... 5 267 Payment of interest ..............................24 (b) Special rule for average-daily- 268 Periodic statem ents..............................24 balance method...................................... 6 269 Regulations.............................................24 Section 230.7—Payment of interest...............6 270 Administrative enforcement...............25 (a) Permissible methods..............................6 271 Civil liability...........................................25 (b) Compounding and crediting 272 Credit unions ........................................ 27 policies ................................ .................. 6 273 Effect on state law ................................27 (c) Date interest begins to accru e............6 274 Definitions...............................................27 Regulation DD Truth in Savings 12 CFR 230; effective September 21, 1992; compliance optional until March 21, 1993 SECTION 230.1—Authority, Purpose, drawal accounts. For purposes of the Coverage, and Effect on State Laws advertising requirements in section 230.8 of this part, the term also includes an account at a (a) Authority. This regulation, known as depository institution that is held by or on be­ Regulation DD, is issued by the Board of half of a deposit broker, if any interest in the Governors of the Federal Reserve System to account is held by or offered to a consumer. The implement the Truth in Savings Act of 1991 term does not include an existing account held (the act), contained in the Federal Deposit by an unincorporated nonbusiness association Insurance Corporation Improvement Act of of natural persons prior to March 21, 1993, 1991 (12 USC 4301 et seq., Pub. L. 102-242, unless the association notifies the institution 105 Stat. 2236). Information-collection re­ that it meets the definition of “consumer.” quirements contained in this regulation have been approved by the Office of Management (b) Advertisement means a commercial mes­ and Budget under the provisions of 44 USC sage, appearing in any medium, that promotes 3501 et seq. and have been assigned OMB No. directly or indirectly the availability of, or a 7100-0255. deposit in, an account. (b) Purpose. The purpose of this regulation (c) Annual percentage yield means a percent­ is to enable consumers to make informed deci­ age rate reflecting the total amount of interest sions about accounts at depository institu­ paid on an account, based on the interest rate tions. The regulation requires depository and the frequency of compounding for a 365- institutions to provide disclosures so that con­ day period and calculated according to the sumers can make meaningful comparisons rules in appendix A of this part. among depository institutions. (d) Average-daily-balance method means the (c) Coverage. This regulation applies to de­ application of a periodic rate to the average pository institutions except for credit unions. daily balance in the account for the period. In addition, the advertising rules in section The average daily balance is determined by 230.8 of this part apply to any person who adding the full amount of principal in the ac­ advertises an account offered by a depository count for each day of the period and dividing institution, including deposit brokers. that figure by the number of days in the (d) Effect on state laws. State law require­ period. ments that are inconsistent with the require­ ments of the act and this regulation are (e) Board means the Board of Governors of preempted to the extent of the inconsistency. the Federal Reserve System. Additional information on inconsistent state (f) Bonus means a premium, gift, award, or laws and the procedures for requesting a pre­ other consideration worth more than S10 emption determination from the Board are set (whether in the form of cash, credit, mer­ forth in appendix C of this part. chandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing SECTION 230.2—Definitions an account balance. The term does not in­ For purposes of