[Code of Federal Regulations]
[Title 12, Volume 6]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR707.4]

[Page 380-381]
 
                       TITLE 12--BANKS AND BANKING
 
            CHAPTER VII--NATIONAL CREDIT UNION ADMINISTRATION
 
PART 707--TRUTH IN SAVINGS--Table of Contents
 
Sec. 707.4  Account disclosures.

    (a) Delivery of account disclosures--(1) Account opening. The credit 
union shall provide the account disclosures to the member or potential 
member before an account is opened or a service is provided, whichever 
is earlier. A credit union is deemed to have provided a service when a 
fee required to be disclosed is assessed. If the member is not present 
at the credit union when the account is opened or a service is provided 
and has not already received the disclosures, the credit union shall 
mail or deliver the disclosures no later than twenty calendar days after 
the account is opened or the service is provided, whichever is earlier.
    (2) Requests. (i) A credit union shall provide the account 
disclosures to any member or potential member upon request. A credit 
union may provide the account disclosures to nonmembers in its sole 
discretion. If the member is not present at the credit union when the 
request is made, the credit union shall mail or deliver the disclosures 
within a reasonable time after it receives the request.
    (ii) In providing disclosures upon request, the credit union may:
    (A) Specify rates as follows:
    (1) For dividend-bearing accounts other than term share accounts, 
specify a dividend rate and annual percentage yield as of the last 
dividend declaration date. In the event that disclosures of a dividend 
rate and annual percentage yield as of the last dividend declaration 
date might be inaccurate because of known or contemplated dividend rate 
changes, the credit union may disclose the prospective dividend rate and 
prospective annual percentage yield. 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.
    (2) For interest bearing accounts and for dividend-bearing term 
share accounts, specify an interest rate and annual percentage yield 
that were offered within the most recent seven calendar days; state that 
the rate and yield are accurate as of an identified date; and provide a 
telephone number members may call to obtain current rate information; 
and
    (B) State the maturity of a term share account as either a term or a 
date.
    (b) Content of account disclosures. Account disclosures shall 
include the following, as applicable:
    (1) Rate information--(i) Annual percentage yield and dividend rate. 
(A) For interest-bearing accounts and for dividend-bearing term share 
accounts, the ``annual percentage yield'' and the ``interest rate'' 
(``dividend rate''), using those terms, and for fixed-rate accounts the 
period of time the interest (dividend) rate will be in effect.
    (B) For dividend-bearing accounts other than term share accounts, a 
credit union shall specify a dividend rate and annual percentage yield 
(using those terms) as of the last dividend declaration date. In the 
event that disclosures of a dividend rate and annual percentage yield as 
of the last dividend declaration date might be inaccurate because of 
known or contemplated dividend rate changes, the credit union may 
disclose the prospective dividend rate and prospective annual percentage 
yield. 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.
    (ii) Variable rates. For variable-rate accounts:
    (A) The fact that the dividend rate and annual percentage yield may 
change;
    (B) How the dividend rate is determined;
    (C) The frequency with which the dividend rate may change; and
    (D) Any limitation on the amount the dividend rate may change.
    (2) Compounding and crediting--(i) Frequency. The frequency with 
which dividends are compounded and credited,

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and the dividend period for dividend-bearing accounts.
    (ii) Effect of closing an account. If members will forfeit dividends 
if they close an account before accrued dividends are credited, a 
statement that the dividends will not be paid in such cases.
    (3) Balance information--(i) Minimum balance requirements. Any 
minimum balance required to:
    (A) Open the account;
    (B) Avoid the imposition of a fee; or
    (C) Obtain the annual percentage yield disclosed.

Except for the balance to open the account, the disclosure shall state 
how the balance is determined for these purposes.
    (ii) Balance computation method. An explanation of the balance 
computation method specified in Sec. 707.7, used to calculate dividends 
on the account.
    (iii) When dividends begin to accrue. A statement of when dividends 
begin to accrue on noncash deposits.
    (4) Fees. The amount of any fee that may be imposed in connection 
with the account (or an explanation of how the fee will be determined) 
and the conditions under which the fee may be imposed.
    (5) Transaction limitations. Any limitations on the number or dollar 
amount of withdrawals or deposits.
    (6) Features of term share accounts. For term share accounts:
    (i) Time requirements. The maturity date.
    (ii) Early withdrawal penalties. A statement that a penalty will be 
imposed for early withdrawal, how it is calculated, and the conditions 
for its assessment.
    (iii) Withdrawal of dividends prior to maturity. If compounding 
occurs and dividends may be withdrawn prior to maturity, a statement 
that the annual percentage yield assumes dividends remain in the account 
until maturity and that a withdrawal will reduce earnings. For accounts 
with a stated maturity greater than 1 year that do not compound 
dividends on an annual or more frequent basis, that require dividend 
payouts at least annually, and that disclose an APY determined in 
accordance with section E of appendix A of this part, a statement that 
dividends cannot remain on account and that payout of dividends is 
mandatory.
    (iv) Renewal policies. A statement of whether or not the account 
will renew automatically at maturity. If it will, a statement of whether 
or not a grace period will be provided and, if so, the length of that 
period must be stated. If the account will not renew automatically, a 
statement of whether dividends will be paid after maturity if the member 
does not renew the account must be stated.
    (7) Bonuses. The amount or type of any bonus, when the bonus will be 
provided, and any minimum balance and time requirements to obtain the 
bonus.
    (8) Nature of dividends. 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.
    (c) Notice to existing account holders--(1) Notice of availability 
of disclosures. Credit unions shall provide a notice to members who 
receive periodic statements and who hold existing accounts of the type 
offered by the credit union on January 1, 1995. The notice shall be 
included on or with the first periodic statement sent after January 1, 
1995 (or on or with the first periodic statement for a statement cycle 
beginning on or after that date). The notice shall state that the 
members may request account disclosures containing terms, fees, and rate 
information for the account. In responding to such a request, credit 
unions shall provide disclosures in accordance with paragraph (a)(2) of 
this section.
    (2) Alternative to notice. As an alternative to the notice described 
in paragraph (c)(1) of this section, credit unions may provide account 
disclosures to members. The disclosures may be provided either with a 
periodic statement or separately, but must be sent no later than when 
the periodic statement described in paragraph (c)(1) of this section is 
sent.

(Approved by the Office of Management and Budget under control number 
3133-0134)

[58 FR 50445, Sept. 27, 1993, as amended at 61 FR 114, Jan. 3, 1996; 63 
FR 71574, Dec. 29, 1998]

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