The Truth-in-Savings Act (TISA) was enacted in December 1991 as part of the Federal Deposit Insurance Corporation Improvement Act. The National Credit Union Administration (NCUA) adopted the Truth-in-Savings Regulations (Part 707) for credit unions, which implement TISA. The following policy and procedure specifies how Genuine Parts Credit Union will comply with the Truth- in-Savings regulations. The Credit Union will cooperate with NCUA to enforce the regulation and monitor ongoing compliance.
Part 707 establishes rules for disclosing to members the dividend rate, annual percentage yield, and all fees imposed in connection with an account, and other terms for an account upon account opening, upon the member’s request. There are disclosure requirements for members’ periodic statements, the maturity and renewal to time accounts, and the advertisement of any deposit account. Part 707 also requires members be notified that account disclosures are available. The effective date for mandatory compliance with Truth-in-Savings is January 1, 1995. Compliance is optional for credit unions prior to January 1, 1995.
II. ACCOUNT EARNINGS
The regulation requires that dividend earnings on each dividend bearing account be computed on the full amount of principal in the account each day for the dividend calculation period.
A. Balance computation method
1. The Credit Union will use an average daily balance method to compute dividends on the following accounts: Share/Savings
2. The Account Disclosures will specify the method used for each particular account.
B. Account earnings on closed accounts.
Accrued but uncredited dividends will not be paid if a member closes any Share/Savings account prior to the time accrued dividends would be credited to the account.
C. Dividend accrual. The Credit Union’s policy for dividend accrual is as follows:
1 Dividends will begin accruing when cash items are received.
2. Dividends will accrue for non-cash items (i.e. share drafts or checks) deposited to Share/Savings accounts (on the business day the checks are deposited).
3. For accounts, dividends will begin to accrue (on the business day non-cash items are deposited).
4. Collected balances are used when computing dividends.
D. Daily Dividend Rate
The Credit Union shall calculate dividends by use of a daily rate of at least1/365 of the dividend rate in a leap year, a daily rate of 1/366 will be used.
E. Rate Information
1. Annual Percentage Yield (APY)
The annual percentage yield is an annualized rate that reflects the relationship between the amount of dividends earned on an account and the frequency of compounding for a 365-day period.
2. APY Formula
The formula used to calculate the APY for purposes of responding to rate inquiries and providing maturity and renewal notices and advertising disclosures
is set forth in Appendix A, Part I, to the NCUA Truth-in-Savings Regulation. The formula used to calculate the APY for periodic statements is set forth in Appendix A, Part II, to the NCUA Truth-in-Savings Regulation.
3. APY Calculation
For purposes of the Credit Union’s TIS Account Disclosures (except periodic statements), the APY calculation will be based on: (I) an assumed term of 365
days for accounts without a stated maturity; and (ii) the actual
4. Dividend Rate
The Dividend Rate means the (declared prospective, be) paid on an account which does not reflect compounding. The Credit Union sets dividend rates on
the following basis: The rate will be based on the earnings of each quarter. and will be posted to the members account the last day of the quarter.
III. RESPONDING TO RATE INQUIRIES
The Credit Union will provide numbers and potential numbers with oral rate information upon any rate inquiry received by Credit Union staff on Credit Union Premises.
A. Content The oral rate information will include timely and accurate rate information as follows:
1. Annual Percentage Yield for account inquired.
2. Dividend rate for account inquired.
3. For time accounts (and interest bearing accounts) the effective date of the rate and the Credit Union’s telephone number for members to call.
B. Accuracy the APY and Dividend Rates will be accurate according to the Credit Union’s rate setting method.
C. Delivery the following staff members will be responsible for responding to rate inquiries:
Credit Union Manager or Administrative Assistant
IV. ACCOUNT DISCLOSURES
Truth-in-Savings (TIS) Disclosures for each of the Credit Union’s accounts will be furnished to members and potential members and potential members upon (I) the opening of an account; and (ii) upon a member or potential member; s request for account disclosures to any Credit Union staff person by mail, in person, or by telephone request.
A. Account Opening Documents
1. Upon opening any account, members will be furnished with a Membership and Account Agreement (Account Agreement), a Funds Availability Policy Disclosure and TIS Account Disclosure (Rate and Fee Schedule) (the “Account Opening Documents”).
a. Members opening accounts in person will be given the Account Opening Documents before the account is opened.
b. Members not present when opening accounts will be sent Account Opening Documents no later than 20 calendar days after the account is opened.
B. Account Disclosures Upon Request
Members and potential members will be furnished TIS Account Disclosures (Rate and Fee Schedule) upon request.
1. Members and potential members requesting TIS Account Disclosures by phone or by mail will mailed a Rate and Fee Schedule within 3 business days after the business day of the request. Members and potential members requesting TIS Account Disclosures in person will receive the Rate and Fee Schedule as soon as possible after the request.
C. Format of Disclosures
The TIS Account Disclosure information will be printed in a Rate and Fee Schedule in a format that is clear and conspicuous. The Rate and Fee Schedule will contain TIS Account Disclosures for all accounts (i.e. share/savings). The Rate and Fee Schedule for all accounts may be printed on one or more schedules.
D. Content of Disclosures
The Rate and Fee Schedule provided to members will include the following account rate information, terms and fees for each account, as applicable:
a. Annual percentage yield
b. Divided rate
(1) Fixed-Rate Accounts. Fixed rate accounts state that a minimum 30 calendar days advance written notice of any rate decrease will be provided before the effective date of the change. The fixed rate period will be stated.
(2) Variable rate accounts. The Credit Union has the following variable rate accounts as variable rate accounts:
1. The TIS Account Disclosures for variable rate accounts will state that the rate will be adjusted at the discretion of the Board of Directors of the Credit
Union and that the Credit Union reserves the right to change dividend rates at any time.
2. Variable rate accounts have no rate change limitations.
3. Compounding and Crediting Frequency
a. The Dividend period and frequency of compounding and crediting for each account offered shall be disclosed.
4. Balance information
a. The minimum balance to open an account, avoid the imposition of fees or obtain the APY will be disclosed, if applicable.
b. The balance computation method used for each account will be disclosed. The Credit Union uses the average daily balance method for each account.
c. The average daily balance method means the application of a periodic rate to the average daily balance in the account for the period. The average daily
balance is determined by adding the figure by the number of days in the period.
5. Dividend accrual policy
Whether accrued by unaccredited dividends will not be paid if the account is closed prior to dividend crediting.
a. The Rate and Fee Schedule will show all account service fees and activity fees categorized for each account and a broad category of all other fees
assessed for all accounts.
b. The Rate and Fee Schedule will include the amount and conditions for all fees to the extent known and required to be disclosed.
7. Transaction Limitations
Any limits on the number or dollar amounts of deposits to, withdrawals from an account for the applicable time period will be disclosed.
V. PERIODIC STATEMENTS
The regulation requires certain information to be included on or with each periodic statement to the extent a statement is provided. This requirement applies to all accounts that receive a statement on a regular basis four or more times a year.
A. Accounts affected
Periodic statement disclosures will be made to existing and new member deposit accounts opened no later than the mandatory compliance date. The Credit Union will provide the required disclosure to all affected accounts.
B. Periodic statement disclosures
The Credit Union’s periodic statement will state the following for each affected account: the annual percentage yield earned, amount of dividends, fees, and length of the statement period, as applicable.
1. The annual percentage yield earned (APYE) reflects the relationship between the actual dividends earned during the statement period and the average daily balance for the same period. It does not reflect any fees imposed, bonuses, or extraordinary dividends earned.
a. The formula for calculating the APYE is contained in Appendix A, Part II, of the regulation.
2. Amount of dividends
a. Dividends are calculated based on the number of days in the statement period.
b. The dollar amount of dividends earned during the statement period will be this figure that is shown on the periodic statement.
c. The average daily balance method is used to calculate the amount of dividends on Share/Savings accounts.
3. Any maintenance or activity fee assessed in connection with the account will be disclosed on the periodic statement. Such fees will be itemized by type and shown as incurred or as a total figure by type of fee.
4. The length of the statement period will be shown by disclosing the total number of days in the period, the beginning and the ending date for the period, or both.
VI. NOTICE TO EXISTING ACCOUNTS
The Credit Union will inform existing account holders that they can request account disclosures.
A. A one-time disclosure notice was be sent to existing account holders on or with the first periodic statement as of the effective date, the periodic statement sent for the first full cycle after the effective date, March 31. 1995.
B. The Credit Union’s one-time disclosure notice furnished to all periodic statement account holders as a statement stuffer.
C. Any member who requests Account Disclosures will be furnished the applicable Account Disclosure(s) requested within a reasonable time, but not later than 3 business days after the business day the request is received.
The Credit Union will not make any misleading or inaccurate advertising. Advertising referring to a dividend rate or annual percentage yield will reflect additional required disclosures in the advertisement.
A. Advertising Disclosures
The statement of a dividend rate or annual percentage yield will require the following items to be disclosed where appropriate in ads, solicitations or
1. The APY figure calculated for the account according to Appendix A, Part I, of the regulation shown to two decimal places and rounded to the nearest onehundredth of one percent. The accuracy tolerance is .05 above or below the correct rate.
2. The period of time the APY is offered. The Credit Union’s advertisements will state the rate currently offered as of a specified date.
3. Any minimum balance required to earn the APY.
4. Any minimum opening deposit if the amount is greater than the minimum necessary to earn the advertised APY.
5. A statement of fees could reduce earnings on the account.
6. For variable rate accounts, a statement that the rate may change after the account is opened.
7. For time account two additional disclosures will be shown:
a. The minimum time or term requirement necessary to earn the APY; and
b. A statement, if applicable, that an early withdrawal penalty may exist.
B. Special Media Coverage
1. Only limited advertising disclosures will be provided when a dividend rate or annual percentage yield is mentioned in certain special media.
a. Certain advertising disclosures are not required when using:
(1) Broadcast media;
(2) Electronic media;
(3) Outdoor media; and
(4) Telephone response machines.
b. For special media, only the following advertising disclosures are required:
(1) The minimum balance requirements;
(2) The term for a time account; and
(3) Certain bonus disclosures, if applicable.
2. For accounts advertised in the Credit Union’s website or on an inside sign (lobby displays) (facing inside the office), two required disclosures will be given:
a. The newsletter or inside sign will disclose the APY of the advertised account; and
b. The ad or inside display will contain the statement: “Ask an employee for further information about the fees and terms applicable to the advertised
C. Any oral rate quotes provided to members or potential members will be expressed as an Annual Percentage yield with optional information about the dividend or interest rate. This covers in person, live telephone and recorded telephone rate quotes given in response to a rate inquiry.
D. Regulatory compliance
All advertising, support materials and sales activities of the Credit Union will comply with all applicable federal and state regulations.
Management controls have been implemented to monitor Truth-in-Savings compliance and protect inadvertent and unintentional errors.
A. The Compliance Officer will monitor compliance and report to the Board annually on the effectiveness of the Credit Union’s Truth-in-Savings
B. The Compliance Officer is responsible for coordinating and monitoring interdepartmental compliance. The Compliance Officer will:
1. Develop policies and procedures to ensure compliance with the NCUA Truth-in Savings regulations;
2. Follow and implement policies or procedures for any changes to the Truthin-Savings regulation;
3. Assist all employees regarding interpreting and implementing the Truth in-Savings regulation;
4. Routinely check all disclosure responsibilities and disclosure statements to determine the level of compliance;
5. Periodically check advertisements to determine the level of compliance;
6. Routinely check TIS Account Disclosures to confirm current and accurate rate information;
7. Coordinate an annual Credit Union-wide review of Truth-in-Savings compliance;
8. Engage a third-party service to conduct a Truth-in-Savings regulation annual review;
9. Report annual compliance findings to the Board of Directors; and
10. Update the Truth-in-Savings regulation policy and procedure as required.
The Credit Union will provide ongoing training to ensure compliance with the Truth-in-Savings regulation.
A. Annual training will be conducted for member service staff who furnish member account information to members and potential members.
B. Periodic training will be provided to support functions such as operations and data processing when needed.
C. The annual third-party review findings will provide the facts and information to determine if support training is required.
XII RECORD RETENTION
The Credit Union’s record retention policy incorporates the specific record-keeping requirements of the Truth-in-Savings regulation. The record retention policy specifies how long documents are retained, where they are retained, where they are stored, who has access to the records, and when they are destroyed.
A. Copies of all printed advertisements and the text or tapes of broadcast or electronic advertisements must be kept for two years.
B. Microfiche, microfilm or other copies of periodic statements will be kept for two years.
C. TIS Account Disclosures will be retained in a disclosure log to demonstrate compliance. Copies of each disclosure given to members will not be retained.
D. Members opening accounts will acknowledge that they have received an Account Disclosure by signing the Account Card.
E. A copy of the one-time Notice of Availability of Disclosures furnished to account holders will be retained for a period of two years.
F. Other information, forms and sample documents will be retained on microfiche or other storage techniques for a period of two years.
G. The Operations Department is responsible for filming, storing and maintaining the appropriate records. The Compliance Officer and Operations Officer will both oversee destroying the documents.
CREDIT UNION OF DIRECTORS – TRUTH-IN-SAVINGS
WHEREAS, Congress passed the Federal Deposit Insurance Corporation Improvement Act in 1991, which included the Truth-in-Savings Act,
WHEREAS, the statute directed the National Credit Union Administration to publish Truth-in-Savings rules, which specify mandatory compliance by July 1, 1994,
WHEREAS, our Credit Union believes that Credit Union account advertising should not be misleading, inaccurate or misrepresented,
WHEREAS, members should be given complete Account Disclosures regarding rates, terms, conditions, fees, methods of calculating dividends and other disclosures,
WHEREAS, the Board directs management to implement comprehensive Truth inReviewed Savings regulation compliance policies and procedures, conduct periodic tests and an annual compliance audit, and report its findings yearly to the Board,
WHEREAS, our Credit Union will comply with the NCUA Truth-in-Savings regulation and cooperate with our NCUA to ensure enforcement,
BE IT RESOLVED the Board adopts the attached Truth-in-Savings policy and procedure submitted to the Board for approval.