The Blog Must Go On; Reg CC Notices

Written by Steve Van Beek

Fear not, the blog will go on.  Sarah and I will do our best to keep everyone up-to-date on the latest compliance issues. 

You will notice a few changes in the daily blog posts.  There will be less Penn State, Steelers, Pirates and Nationals references.  But, there will be an uptick in Michigan, Detroit Tigers, Lions and Red Wings mentions as well as Sarah's Ohio State Buckeyes and Cincinnati Reds and Bengals.

In case you were wondering, Anthony's shoes have indeed been sent to Seattle for display.  

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We have been getting quite a few questions about the upcoming change to $200 under Reg CC.  A while back, Anthony hit on the underlying requirement in Section 229.18(e) to provide notice within 30 days of the change (since the change is beneficial to members).  But how detailed does the notice need to be and what format does it need to be in?

The staff commentary to 229.18(e) provides some insight:

"E. 229.18(e)  Changes in Policy

1. This paragraph requires banks to send notices to their customers when the banks change their availability policies with regard to consumer accounts. A notice may be given in any form as long as it is clear and conspicuous. If the bank gives notice of a change by sending the customer a complete new availability disclosure, the bank must direct the customer to the changed terms in the disclosure by use of a letter or insert, or by highlighting the changed terms in the disclosure.

2. Generally, a bank must send a notice at least 30 calendar days before implementing any change in its availability policy. If the change results in faster availability of deposits—for example, if the bank changes its availability for nonlocal checks from the fifth business day after deposit to the fourth business day after deposit—the bank need not send advance notice. The bank must, however, send notice of the change no later than 30 calendar days after the change is implemented. A bank is not required to give a notice when there is a change in appendix B (reduction of schedules for certain nonlocal checks)."

Credit unions have flexibility when providing the notice - provided the disclosure is clear and provided within 30 days of the change (i.e. by August 21, 2011).  The Fed does not require special language to be used in the notice.  Rather, the notice should simply describe the change in the credit union's policy.  

As for format, a message on a periodic statement would suffice.  Similarly, a notice in the credit union's newsletter should work, provided it is sent to all impacted members.  A website message alone would be insufficient as it would not be provided to all members (only those who went to the CU's website would see the notice).  Of course, a credit union could provide a notice on its website in addition to a notice sent to all members. 

Comments

[Joyce]

I have total faith that you and Sarah will do a great job on the blog!

[LaBrandon Dates]

Thanks for the summary! I'm a CU Marketing Coordinator just discovering this site...you all do an incredible job!