Collapse to view only § 4312. Effect on State law
- § 4301. Findings and purpose
- § 4302. Disclosure of interest rates and terms of accounts
- § 4303. Account schedule
- § 4304. Disclosure requirements for certain accounts
- § 4305. Distribution of schedules
- § 4306. Payment of interest
- § 4307. Periodic statements
- § 4308. Regulations
- § 4309. Administrative enforcement
- § 4310. Repealed.
- § 4311. Credit unions
- § 4312. Effect on State law
- § 4313. Definitions
§ 4301. Findings and purpose
(a) Findings
(b) Purpose
It is the purpose of this chapter to require the clear and uniform disclosure of—
(1) the rates of interest which are payable on deposit accounts by depository institutions; and
(2) the fees that are assessable against deposit accounts,
so that consumers can make a meaningful comparison between the competing claims of depository institutions with regard to deposit accounts.
(Pub. L. 102–242, title II, § 262, Dec. 19, 1991, 105 Stat. 2334.)
§ 4302. Disclosure of interest rates and terms of accounts
(a) In generalExcept as provided in subsections (b) and (c), each advertisement, announcement, or solicitation initiated by any depository institution or deposit broker relating to any demand or interest-bearing account offered by an insured depository institution which includes any reference to a specific rate of interest payable on amounts deposited in such account, or to a specific yield or rate of earnings on amounts so deposited, shall state the following information, to the extent applicable, in a clear and conspicuous manner:
(1) The annual percentage yield.
(2) The period during which such annual percentage yield is in effect.
(3) All minimum account balance and time requirements which must be met in order to earn the advertised yield (and, in the case of accounts for which more than 1 yield is stated, each annual percentage yield and the account minimum balance requirement associated with each such yield shall be in close proximity and have equal prominence).
(4) The minimum amount of the initial deposit which is required to open the account in order to obtain the yield advertised, if such minimum amount is greater than the minimum balance necessary to earn the advertised yield.
(5) A statement that regular fees or other conditions could reduce the yield.
(6) A statement that an interest penalty is required for early withdrawal.
(b) Broadcast and electronic media and outdoor advertising exception
(c) Disclosure required for on-premises displaysThe disclosure requirements contained in this section shall not apply to any sign (including a rate board) disclosing a rate or rates of interest which is displayed on the premises of the depository institution if such sign contains—
(1) the accompanying annual percentage yield; and
(2) a statement that the consumer should request further information from an employee of the depository institution concerning the fees and terms applicable to the advertised account.
(d) Misleading descriptions of free or no-cost accounts prohibitedNo advertisement, announcement, or solicitation made by any depository institution or deposit broker may refer to or describe an account as a free or no-cost account (or words of similar meaning) if—
(1) in order to avoid fees or service charges for any period—
(A) a minimum balance must be maintained in the account during such period; or
(B) the number of transactions during such period may not exceed a maximum number; or
(2) any regular service or transaction fee is imposed.
(e) Misleading or inaccurate advertisements, etc., prohibited
(Pub. L. 102–242, title II, § 263, Dec. 19, 1991, 105 Stat. 2334; Pub. L. 102–550, title IX, § 957(a), Oct. 28, 1992, 106 Stat. 3896; Pub. L. 104–208, div. A, title II, § 2604(b), Sept. 30, 1996, 110 Stat. 3009–471; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4303. Account schedule
(a) In general
(b) Information on fees and charges
The schedule required under subsection (a) with respect to any account shall contain the following information:
(1) A description of all fees, periodic service charges, and penalties which may be charged or assessed against the account (or against the account holder in connection with such account), the amount of any such fees, charge, or penalty (or the method by which such amount will be calculated), and the conditions under which any such amount will be assessed.
(2) All minimum balance requirements that affect fees, charges, and penalties, including a clear description of how each such minimum balance is calculated.
(3) Any minimum amount required with respect to the initial deposit in order to open the account.
(c) Information on interest rates
The schedule required under subsection (a) with respect to any account shall include the following information:
(1) Any annual percentage yield.
(2) The period during which any such annual percentage yield will be in effect.
(3) Any annual rate of simple interest.
(4) The frequency with which interest will be compounded and credited.
(5) A clear description of the method used to determine the balance on which interest is paid.
(6) The information described in paragraphs (1) through (4) with respect to any period after the end of the period referred to in paragraph (2) (or the method for computing any information described in any such paragraph), if applicable.
(7) Any minimum balance which must be maintained to earn the rates and obtain the yields disclosed pursuant to this subsection and a clear description of how any such minimum balance is calculated.
(8) A clear description of any minimum time requirement which must be met in order to obtain the yields disclosed pursuant to this subsection and any information described in paragraph (1), (2), (3), or (4) that will apply if any time requirement is not met.
(9) A statement, if applicable, that any interest which has accrued but has not been credited to an account at the time of a withdrawal from the account will not be paid by the depository institution or credited to the account by reason of such withdrawal.
(10) Any provision or requirement relating to nonpayment of interest, including any charge or penalty for early withdrawal, and the conditions under which any such charge or penalty may be assessed.
(d) Other information
(e) Style and format
(Pub. L. 102–242, title II, § 264, Dec. 19, 1991, 105 Stat. 2335; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4304. Disclosure requirements for certain accounts
The Bureau shall require, in regulations which the Bureau shall prescribe, such modification in the disclosure requirements under this chapter relating to annual percentage yield as may be necessary to carry out the purposes of this chapter in the case of—
(1) accounts with respect to which determination of annual percentage yield is based on an annual rate of interest that is guaranteed for a period of less than 1 year;
(2) variable rate accounts;
(3) accounts which, pursuant to law, do not guarantee payment of a stated rate;
(4) multiple rate accounts; and
(5) accounts with respect to which determination of annual percentage yield is based on an annual rate of interest that is guaranteed for a stated term.
(Pub. L. 102–242, title II, § 265, Dec. 19, 1991, 105 Stat. 2336; Pub. L. 102–550, title XVI, § 1604(e)(2)(A), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4305. Distribution of schedules
(a) In general
A schedule required under section 4303 of this title for an appropriate account shall be—
(1) made available to any person upon request;
(2) provided to any potential customer before an account is opened or a service is rendered; and
(3) provided to the depositor, in the case of any time deposit which has a maturity of more than 30 days 1
1 So in original. Probably should be followed by “and”.
is renewable at maturity without notice from the depositor, at least 30 days before the date of maturity.(b) Distribution in case of certain initial deposits
If—
(1) a depositor is not physically present at an office of a depository institution at the time an initial deposit is accepted with respect to an account established by or for such person; and
(2) the schedule required under section 4303(a) of this title has not been furnished previously to such depositor,
the depository institution shall mail the schedule to the depositor at the address shown on the records of the depository institution for such account no later than 10 days after the date of the initial deposit.
(c) Distribution of notice of certain changes
If—
(1) any change is made in any term or condition which is required to be disclosed in the schedule required under section 4303(a) of this title with respect to any account; and
(2) the change may reduce the yield or adversely affect any holder of the account,
all account holders who may be affected by such change shall be notified and provided with a description of the change by mail at least 30 days before the change takes effect.
(d) Distribution in case of accounts established by more than 1 individual or by a group
(e) Notice to account holders as of effective date of regulations
(Pub. L. 102–242, title II, § 266, Dec. 19, 1991, 105 Stat. 2337; Pub. L. 102–550, title XVI, § 1604(e)(1), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 104–208, div. A, title II, § 2604(d), Sept. 30, 1996, 110 Stat. 3009–471; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4306. Payment of interest
(a) Calculated on full amount of principal
(b) No particular method of compounding interest required
(c) Date by which interest must accrue
(Pub. L. 102–242, title II, § 267, Dec. 19, 1991, 105 Stat. 2338; Pub. L. 102–550, title XVI, § 1604(e)(2)(B), (C), Oct. 28, 1992, 106 Stat. 4084.)
§ 4307. Periodic statements
Each depository institution shall include on or with each periodic statement provided to each account holder at such institution a clear and conspicuous disclosure of the following information with respect to such account:
(1) The annual percentage yield earned.
(2) The amount of interest earned.
(3) The amount of any fees or charges imposed.
(4) The number of days in the reporting period.
(Pub. L. 102–242, title II, § 268, Dec. 19, 1991, 105 Stat. 2338.)
§ 4308. Regulations
(a) In general
(1) Regulations required
(2) Effective date of regulations
(3) Contents of regulations
(4) Date of applicability
(b) Model forms and clauses
(1) In general
(2) Use of forms and clauses deemed in complianceNothing in this chapter may be construed to require a depository institution to use any such model form or clause prescribed by the Bureau under this subsection. A depository institution shall be deemed to be in compliance with the disclosure provisions of this chapter if the depository institution—
(A) uses any appropriate model form or clause as published by the Bureau; or
(B) uses any such model form or clause and changes it by—
(i) deleting any information which is not required by this chapter; or
(ii) rearranging the format,
if in making such deletion or rearranging the format, the depository institution does not affect the substance, clarity, or meaningful sequence of the disclosure.
(3) Public notice and opportunity for comment
(Pub. L. 102–242, title II, § 269, Dec. 19, 1991, 105 Stat. 2338; Pub. L. 102–550, title IX, § 957(b), title XVI, § 1604(e)(2)(D)–(H), Oct. 28, 1992, 106 Stat. 3897, 4084; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4309. Administrative enforcement
(a) In generalSubject to subtitle B of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5511 et seq.], compliance with the requirements imposed under this chapter shall be enforced under—
(1) section 8 of the Federal Deposit Insurance Act [12 U.S.C. 1818] by the appropriate Federal banking agency (as defined in section 3(q) of that Act [12 U.S.C. 1813(q)]), with respect to—
(A) insured depository institutions (as defined in section 3(c)(2) of that Act [12 U.S.C. 1813(c)(2)]);
(B) depository institutions described in clause (i), (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve Act [12 U.S.C. 461(b)(1)(A)] which are not insured depository institutions (as defined in section 3(c)(2) of the Federal Deposit Insurance Act [12 U.S.C. 1813(c)(2)]); and
(C) depository institutions described in clause (v) or (vi) of section 19(b)(1)(A) of the Federal Reserve Act [12 U.S.C. 461(b)(1)(A)] which are not insured depository institutions (as defined in section 3(c)(2) of the Federal Deposit Insurance Act [12 U.S.C. 1813(c)(2)]);
(2) the Federal Credit Union Act [12 U.S.C. 1751 et seq.], by the National Credit Union Administration Bureau 1
1 So in original. Probably should be “Board”.
in the case of depository institutions described in clause (iv) of section 19(b)(1)(A) of the Federal Reserve Act [12 U.S.C. 461(b)(1)(A)]; and(3) subtitle E of the Consumer Financial Protection Act of 2010 [12 U.S.C. 5561 et seq.], by the Bureau, with respect to any person subject to this chapter.
(b) Additional enforcement powers
(1) Violation of this chapter treated as violation of other Acts
(2) Enforcement authority under other Acts
(c) Regulations by agencies other than the Bureau
(Pub. L. 102–242, title II, § 270, Dec. 19, 1991, 105 Stat. 2339; Pub. L. 102–550, title XVI, § 1604(e)(2)(I)–(K), (3), (4), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 111–203, title X, § 1100B(1), (2), July 21, 2010, 124 Stat. 2109, 2110.)
§ 4310. Repealed. Pub. L. 104–208, div. A, title II, § 2604(a), Sept. 30, 1996, 110 Stat. 3009–470
§ 4311. Credit unions
(a) In general
(b) Regulations prescribed by NCUA
(Pub. L. 102–242, title II, § 272, Dec. 19, 1991, 105 Stat. 2342; Pub. L. 102–550, title XVI, § 1604(e)(2)(P), (Q), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 111–203, title X, § 1100B(1), (3), July 21, 2010, 124 Stat. 2109, 2110.)
§ 4312. Effect on State law
The provisions of this chapter do not supersede any provisions of the law of any State relating to the disclosure of yields payable or terms for accounts to the extent such State law requires the disclosure of such yields or terms for accounts, except to the extent that those laws are inconsistent with the provisions of this chapter, and then only to the extent of the inconsistency. The Bureau may determine whether such inconsistencies exist.
(Pub. L. 102–242, title II, § 273, Dec. 19, 1991, 105 Stat. 2342; Pub. L. 102–550, title XVI, § 1604(e)(2)(R), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 111–203, title X, § 1100B(1), July 21, 2010, 124 Stat. 2109.)
§ 4313. Definitions
For the purposes of this chapter—
(1) Account
(2) Annual percentage yield
(3) Annual rate of simple interest
The term “annual rate of simple interest”—
(A) means the annualized rate of interest paid with respect to each compounding period, expressed as a percentage; and
(B) may be referred to as the “annual percentage rate”.
(4) Bureau
(5) Deposit broker
The term “deposit broker”—
(A) has the meaning given to such term in section 1831f(f)(1) 1
1 See References in Text note below.
of this title; and(B) includes any person who solicits any amount from any other person for deposit in an insured depository institution.
(6) Depository institution
(7) Interest
(8) Multiple rate account
(Pub. L. 102–242, title II, § 274, Dec. 19, 1991, 105 Stat. 2342; Pub. L. 102–550, title XVI, § 1604(e)(2)(S), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 103–325, title III, § 332, Sept. 23, 1994, 108 Stat. 2232; Pub. L. 104–208, div. A, title II, § 2604(c), Sept. 30, 1996, 110 Stat. 3009–471; Pub. L. 111–203, title X, § 1100B(1), (4), July 21, 2010, 124 Stat. 2109, 2110.)