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Federal R eserve Bank
OF DALLAS
ROBERT
D. M C T E E R , J R .
DALLAS, T E X A S
p re s id e n t
AND CHIEF EX ECUTIVE O F FIC E R
75222
September 7, 1993
Notice 93-95
TO:
The Chief Executive Officer of
each financial institution in the
Eleventh Federal Reserve District
SUBJECT
Amendments to Regulation DD
(Truth in Savings)
DETAILS
The Board of Governors of the Federal Reserve
System has published amendments in slip-sheet form to
Regulation DD, effective July 1993. The new slip sheet
should be inserted in your Regulations binder.
ENCLOSURE
The new slip sheet is enclosed.
MORE INFORMATION
For more information, please contact Eugene
Coy at (214) 922-6201.
For additional copies of this
B a n k ’s notice and the slip sheet, please contact the
Public Affairs Department at (214) 922-5254.
Sincerely yours,
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
Intrastale (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 (FedHistory@dal.frb.org)
Board of Governors of the Federal Reserve System
Amendments to Regulation D D
Truth in Savings
July 1993*
(ii) I f a sign exem pt by this paragraph
states a rate o f return, it shall—
( A ) State the rate as an “annual
percentage yield.” using that term or
the term “ A P Y .” The sign shall not
state any other rate, except that the
interest rate may be stated in con
junction with the annual percentage
yield to which it relates.
(B ) Contain a statement advising
consum ers to contact an em ployee
for further information about appli
cable fees and terms.
1. Effective M arch 21, 1993, section 230.2(a)
is a m en d ed by extending the m an da tory
com pliance d ate fro m M arch 21, 1993, to
June 21, 1993.
2. E ffective
M arch
21,
1993,
section
230.4(c)(1) is a m en d ed by exten din g both
the m an da tory com pliance d a te a n d the no
tice requirem ent d a te fr o m M arch 21, 1993,
to June 21, 1993.
3. Effective
M arch
21,
1993,
section
230.5(a)(2)(H ) is a m en d ed by deletin g the
words "by third p a rtie s”.
4. Effective M arch 21, 1993, section 230.8(e)
is revised to read as follows:
(e ) E xem ption f o r certain advertisem ents.
(1 ) Certain m edia. If an advertisement
is made through one o f the following m e
dia. it need not contain the information
in paragraphs ( c ) ( 1 ) , ( c ) ( 2 ) , ( c ) ( 4 ) ,
( c ) ( 5 ) , ( c ) ( 6 ) ( ii), ( d ) ( 4 ) , and ( d ) ( 5 )
o f this section:
(i) broadcast or electronic media,
such as television or radio;
(ii) outdoor media, such as billboards;
or
(iii) telephone response machines.
( 2 ) Indoor signs.
(i) Signs inside the premises o f a de
pository institution (or the premises o f
a deposit broker) are not subject to
paragraphs (b ) , ( c ) , (d ), or ( e ) ( 1 ) o f
this section unless they face outside the
premises and can reasonably be viewed
by a consumer only from outside the
premises.
• The complete rules, as amended effective March 21,
Io*>3. i n s i s t of—
• t h e p a m p h l e t d a t e d N o v e m b e r 1992 ( s e e i n sid e c o v e r )
and
• th is slip sheet.
5. Effective M arch 21, 1993, appendix A, p a rt
I I is a m en d ed b y add in g a new paragraph A
heading a fter the second paragraph; by cor
recting a ll fo u r fo rm u la s un der paragraph
A to a d d an open parenthesis after the first
bracket; a n d by add in g a new p a r t B after
exam ple (3), as follows:
Part II. A n n u a l P ercen tage
E arned for P eriod ic S tatem en ts
*
*
*
*
Y ield
*
T he annual percentage yield earned shall
be calculated by using the following formu
las ( “ A P Y earned” is used for convenience
in the formulas):
A.
G eneral Form ula
A P Y earned - 100
[ (1 -I- Interest earn ed /
B alan ce)l,t,/D*" p l — 1]
"”d
*
*
*
*
*
Examples:
( 1) * * *
A P Y earned = 100
[(1 + 5 . 2 5 / 1 . 0 0 0 ) ' ^ ’
-
1]
A P Y earned = 6.58%
Regulation D D
(2 ) » * *
A P Y Earned = 100
A P Y earned = 100
[(1 -
6 . 5 0 / 1.500V'"” W
l
1]
A P Y earned = 5.40%
-
(3 ) * * *
ii
A P Y Earned = 5.00%
A P Y earned = 100
[(1 + 21/2.000)'M/'m
-
1]
T R U T H IN S A V IN G S A C T
A P Y earned = 4.28%
The follow in g sections were a m en d ed by the
H ousing a n d C om m u n ity D evelopm ent A ct o f
1992 (Pub. L. No. 102-550):
B. Special F orm ula f o r Use Where
Periodic S ta tem e n t Is S en t M ore Often
Than the P eriod f o r Which In terest Is
C om poun ded
Institutions that use the daiiy-balance
method to accrue interest and that issue
periodic statements more often than the
period for which interest is com pounded
shall use the following special formula:
A P Y Earned = 100
{[1
/ Interest e a m ed \
V
Balance
/
(
D ays in period
\
1 365/C ompounding
Compounding!
-
1}
T he following definition applies for use in
this formula (all other terms are defined
under part II):
"C ompounding" is the number o f days in
each com pounding period.
A ssum e an institution calculates interest
for the statement period using the dailybalance method, pays a 5.00 percent inter
est rate, com pounded annually, and pro
vides periodic statements for each m onthly
cycle. T he account has a daily balance o f
SI.000 for a 30-day statement period. The
interest earned is S 4 .11 for the period, and
the annual percentage yield earned (using
the special formula above) is 5.00 percent:
6. The fir s t sentence in section 263(a) is re
vised to read as follow s:
(a ) In general. Except as provided in sub
sections (b ) and ( c ) , each advertisement,
*
*
*
7. Section 263 is a m en d ed by addin g a new
paragraph (c). as follows, a n d redesignating
the old paragraphs (c) a n d (d) as (d) and
(e), respectively:
( c ) D isclosure required f o r on-prem ises
displays.
( 1 ) The disclosure requirements con
tained in this section shall not apply to
any sign (including a rate board) disclos
ing a rate or rates o f interest which is
displayed on the premises o f the deposi
tory institution if such sign contains—
( A ) the accom panying annual per
centage yield: and
(B ) a statement that the consumer
should request further information
from an em ployee o f the depository in
stitution concerning the fees and terms
applicable to the advertised account.
( 2 ) For purposes o f paragraph ( 1 ) , a
sign shall only be considered to be dis
played on the premises o f a depository
institution if the sign is designed to be
viewed only from the interior o f the
premises o f the depository institution.
Regulation D D
8. The first sentence o f section 265 is a m en ded
by changing the word "Act" to "subtitle".
9. Section 266(e)
follows:
is a m en d ed
to
read as
( e ) N otice to account holders as o f the ef
fective da te o f regulations. For any account
for which the depository institution deliv
ers an account statement on a quarterly or
more frequent basis, the depository institu
tion shall include on or with the first regu
larly scheduled mailing sent after the end
o f the 6-month period beginning o f the
date o f publication o f regulations issued by
the Board in final form, a statement that
the account holder has the right to request
an account schedule containing the terms,
charges, and interest rates o f the account,
and that the account holder may wish to
request such an account schedule.
by
changing
"subtitle".
the
word
"Act"
to
12. Section 2 69 (a)(2) is a m en d ed by changing
the effective d a te o f the regulations fro m 6
m onths to 9 m onths a fter publication o f
th e fin a l regulations.
13. Section 270(a). (b). a n d (c) are a m en d ed
by changing the word "Act" to "subtitle".
14. Section 271(a). (c)(1), (c)(2), (d). (g),
(h)(1), (i)(l), a n d (i)(2) are a m en d ed by
changing the w ord "Act” to "subtitle”.
15. Section 27 2(a ) a n d (b) are a m en d ed by
changing the word "Act" to "subtitle".
10. Section 267(a) a n d (c) are a m en d ed by
changing the word "Act" to "subtitle".
16. Section 273 is a m en d ed by changing the
word "Act" to "subtitle".
11. Section 269(a)(1). (3). a n d (4), a n d section
26 9(b)(1)
and
(2)
are
a m en d ed
17. Section 274 is a m en d ed by changing the
word "Act" to "subtitle".
@FedFRASER