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FEDERAL RESERVE BANK
OF NEW YORK
[
Circular No. 10616
January 13, 1993
”1
TRUTH IN SAVINGS
Proposed Amendments to Regulation DD
Comments due February 1
To All Depository Institutions in the Second
Federal Reserve District, and Others Concerned:
The following statement has been issued by the Board of Governors of the
Federal Reserve System:
T h e F ederal R eserv e B oard has issu e d for p u b lic co m m en t p ro p o sed a m en d m en ts
to R eg u la tio n D D (Truth in S a v in g s) to carry ou t recen t ch a n g e s m ad e to th e Truth
in S a v in g s A ct b y th e H o u sin g and C o m m u n ity D ev e lo p m e n t A ct o f 1 9 9 2 .
T h e law e x ten d s th e m an d atory date for c o m p lia n c e w ith th e req u irem en ts o f the
Truth in S a v in g s A ct b y three m on th s, so that in stitu tio n s m ust c o m p ly b y June 2 1 ,
1 9 9 3 , rather than M arch 2 1 , 1 9 9 3 . T h e law a lso m o d ifie s th e a d v e r tisin g ru les relatin g
to sig n s in an in stitu tio n ’s lobby, and m a k es a tech n ica l ch a n g e to the p ro v isio n d e a lin g
w ith n o tic e s required to b e g iv e n to e x is tin g a c c o u n t holders.
T h e B oard is se e k in g co m m en t on w h eth er an ad d ition al fo rm u la sh o u ld be added
to ca lc u la te th e annual p ercen tage y ield (A P Y ) ea rn ed that is p rovid ed on p erio d ic
statem en ts.
In a d d itio n , the B oard is p r o p o sin g to m ak e a m in or c h a n g e to th e regu lation and
to c la r ify and p rovid e ad d ition al g u id a n c e on a fe w is su e s that h ave b een raised by
in stitu tio n s sin c e p u b lication o f the fin al regu lation in Septem ber.
C o m m en t is req u ested by F ebruary 1, 1 9 9 3 .
Printed on the following pages is the text of the proposal, which has been
reprinted from the
comments may be sent to the Board, as
specified in the notice, or to our Compliance Examinations Department.
Federal Register,
E.
G
erald
C
o r r ig a n
,
President.
Federal Register / Vol. 58, No. 2 / Tuesday, January 5, 1993 / Proposed Rules
271
of the final regulation on September 21,
1992.
DATES: Comments must be received on
or before February 1,1993.
ADDRESSES: Comments should refer to
Docket No. R-0791, and may be mailed
to Mn William W. Wiles, Secretary,
Board of Governors of the Federal
Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551. Comments also may be
delivered to room B-2222 of the Eccles
Building between 8:45 a>m. and 5:15
p.m. weekdays, or to the guard station
in the Eccles Building courtyard on 20th
Street, NW (between Constitution
Avenue and C Street) any time.
Comments may be inspected in Room
B-1122 between 9 a.m. and 5 p.jn.
weekdays, except as provided in 12 CFR
261.8 of the Board’s rules regarding the
availability of information.
FOR FURTHER INFORMATION CONTACT:
Jane Ahrens, Kyung Cho, Kurt
Schumacher, or Mary Jane Seebach,
Staff Attorneys, Division of Consumer
and Community Affairs, at (202) 7365500; for the hearing impaired only
contact Dorothea Thompson,
Telecommunications Device for the
Deaf, at (202) 452-3544, Board of
Governors of the Federal Reserve
System, Washington, DC 20551.
FEDERAL RESERVE SYSTEM
SUPPLEMENTARY INFORMATION:
(1) Background
The Truth in Savings Act (act)
(contained
in the Federal Deposit[Regulation DO; Docket No. R-0791]
Insurance Corporation Improvement Act
Truth in Savings; Proposed Regulatory of 1991) was enacted in December 1991.
The Board published proposed rules to
Amendments
implement the act on April 13,1992 (57
AGENCY: Board of Governors of the
FR 12735), and published a final ‘
Federal Reserve System.
regulation, Regulation DD, on
September 21,1992 (57 FR 43337)
ACTION: Proposed rule.
(correction notice at 57 FR 46480,
SUMMARY: The Board is publishing for
October 9,1992).
comment proposed amendments to
The Housing and Community
Regulation DD (Truth in Savings) to
Development Act (HCDA) was enacted
implement recent changes made to the
in October 1992 (Pub. L. 102-550,106
Truth in Savings Act by the Housing
Stat. 3672). The law contains three
and Community Development Act of
provisions that amend the Truth in
1992. The law extends the mandatory
Savings Act. The provisions extend the
date for compliance with the
effective date for compliance with the
requirements of the Truth in Savings
act by three months, reduce the
Act by three months, so that institutions requirements that apply to some
must comply by June 21,1993, rather
advertisements on the premises of a
than March 21,1993. The law also
depository institution, and modify the
modifies the advertising rules relating to provision that requires a notice to be
signs in an institution’s lobby, and
given to existing account holders
makes a technical change to the
alerting them to the availability of
provision dealing with notices required account disclosures.
to be given to existing account holders.
To implement the changes, the Board
is proposing regulations for comment,
In addition, the Board is proposing to
make a minor change to the regulation
and expects to adopt final amendments
and clarify and provide additional
before March 21,1993—the compliance
guidance on a few issues that have been date currently set forth in Regulation
DD. In light of the minornature of the
raised by institutions since publication
12 CFR Part 230
272
Federal Register / Vol. 58, No. 2 7 Tuesday, January 5, 1993 / Proposed Rules
amendments and in order to ensure that
amendments are adopted by March 21,
the Board is providing only a 30-day
comment period. In addition to
proposing rules to implement the
statutory changes, the Board is
proposing to make one minor change to
the regulation and to provide guidance
on a few other issues that have been
raised by institutions since adoption of
the final rules. Due to a significant
number of questions raised about these
issues, the Board proposes to provide
guidance at this time, rather than
delaying until the Official Staff
Commentary is proposed for comment
in the fall of 1993.
(2) Proposed Regulatory Provisions
Mandatory Compliance Date
The final regulation referred to March
21,1993, as the mandatory date for
complying with the requirements of the
regulation. The definition of “account”
under § 230.2(a) states that existing
accounts held by an unincorporated
nonbusiness association of natural
persons prior to March 21,1993 are not
included in the term.
As discussed above, the mandatory
date for compliance with the
requirements of the Truth in Savings
Act was extended by the HCDA for three
months. (Section 957(b) of the HCDA
amended section 269(a)(2) of the Truth
in Savings Act.) The Board proposes to
replace the reference to “March 21”
with “June 21” in § 230.2(a).
In several places, the supplementary
information accompanying the final
regulation referred to an effective date of
xMarch 21,1993. The proposed change to
the regulation supersedes all such
references.
In conjunction with the final
regulation, the Board had deleted the
existing advertisement and disclosure
rules in Regulation Q (12 CFR part 217)
as of March 21,1993, when the
requirements in Regulation DD would
become mandatory. Consistent with the
change to Regulation DD, the Board will
make a technical amendment to
Regulation Q so that the requirements in
Regulation Q will remain in effect until
June 21,1993. As stated in the
supplementary information
accompanying the final regulation,
however, institutions may begin
complying solely with the advertising
provisions in Regulation DD prior to the
date.for mandatory compliance, instead
of the advertising and disclosures
provisions in Regulation Q.
Section 230.4—Account Disclosures
(c) Notice to existing account
holders—(1) Notice o f availability o f
disclosures. As enacted in December
1991, section 266(e) of the act would
have required institutions to Include a
notice of disclosure availability on or
with any regularly scheduled periodic
statement sent to existing consumer
account holders within 180 days of
adoption of the Board’s final rule. Jn
implementing this provision, the
Board’s regulation specified that this
notice to existing account holders did
not have to be sent prior to the
mandatory compliance date of March
21,1993. Instead, the notice was to be
included on or with the first periodic
statement sent on or after March 21,
1993 (or the first periodic statement for
a statement cycle beginning on or after
that date).
As stated above, section 957(b) of the
HCDA extended the mandatory
compliance date from 6 months to 9
months after the Board’s issuance of a
final rule. In addition, section 1604(e) of
the HCDA amended section 266(e) of
the Truth in Savings Act to require that
the notice to existing account holders be
sent “on or with the first regularly
scheduled mailing sent after the end of
the 6 month period beginning on the
date of publication” of the Board’s
implementing regulations (emphasis
added).
If the revisions to statutory sections
957(b) and 1604(e) were taken literally,
the amended act could be read to
require institutions to provide the notice
to existing consumer account holders on
or with the first periodic statement sent
after March 21,1993. The Board
believes that the Congress did not
intend for institutions to have to comply
with this disclosure duty prior to the
new compliance data, but rather
intended to grant institutions an
additional three-month period to
comply. Therefore, the Board is
proposing to amend § 230.4(c) of
Regulation DD to require the notice of
account disclosure availability to be
included on or with the first periodic
statement sent on or after the mandatory
compliance d^te of June 21,1993 (or the
first periodic statement for a statement
cycle beginning on or after that date).
The Board solicits comments on this
proposal.
Section 230.5—Subsequent Disclosures
(a)
Change in terms—(2) No notice
required—(ii) Check printing fees. The
act and regulation require institutions to
provide a 30-day advance notice to
consumers of any change in a
previously disclosed term that may
adversely affect the consumer. In the
final rule the Board used its exception
authority, pursuant to section 269(a)(3)
of the act, to create a limited exception
to the notice requirements for changes
in check printing fees "assessed by third
parties.”
Since release of the final rule, the
Board has received numerous inquiries
about the scope of this exception. For
example, institutions have asked
whether they can take advantage of the
exception if the check-printing vendor
directly bills the institution which adds
a "mark-up” and passes the fee on to the
consumer. Institutions have asked
whether the exception applies if the
third party originates a debit to the
account, but the institution is involved
in determining the fee.
In order to simplify the requirement
and avoid further confusion, the Board
proposes to clarify the exception so that
an institution does not have to provide
a change in terms notice for check
printing fees—regardless of whether the
fee is assessed by a third party or by the
depository institution itself. The Board
solicits comment on whether it is
necessary to broaden the current
exception in this manner.
The imposition of check printing fees
by a third party was referred to in the
supplementary information to section
230.8(a) that accompanied the final
regulation. That ^ctiort prohibits
institutions from advertising an account
as “free” or “no cost” if a “maintenance
or activity” feemight be imposed on the
account. The supplementary
information specified that fees imposed
by a third party to print checks are not
considered maintenance or activity fees
imposed on the account. Consistent
with the proposed amendment to the
regulation and in light of the concerns
discussed above, the Board proposes to
clarify thaj check printing fees are not
maintenance or activity fees, regardless
of who imposes them. Thus, an
institution that imposes check printing
fees could state that an account is free,
if no maintenance or activity fees are
imposed.
Section 230.8—Advertising
(e)
Exemption for certain
advertisements. Section 263(a) of the act
provides that a reference to a specific
interest rate, yield, or rate of earnings in
an advertisement triggers a duty to state
certain additional information,
including the annual percentage yield..
The HCDA amendment to section 263(c)
of the advertising rules provides that if
a rate is displayed on a sign (including
a rate board) designed to be viewed only
from the interior of an institution, the
disclosure requirements of section 263
do not apply. Instead, only the annual
percentage yield and a statement
advising consumers to ask employees
about fees and terms applicable to the
Federal Register / Vol. 58, No. 2 / Tuesday, January 5, 1993 / Proposed Rules
advertised account are required to be
stated.
The regulation currently exempts
lobby signs from some advertising
disclosure reouirements. The Board’s
proposal would amend the regulation by
reorganizing § 230.8(e). A new
subparagraph (2) would be added to
address disclosure requirements for
lobby signs.
The proposal dries not define the term
"lobby sign.” The Board believes that
lobby signs would include signs such as
preprinted posters and chalk or peg
boards, whether affixed to a wall or
displayed on an easel or a counter. The
Board also proposes that a lobby sign
include any advertisement "facing
inside” an institution, including
computer screens and electronic media.
The Board believes, however, that a
lobby sign does not include a document
that can be retained by a consumer
(such as a print-out from a computer or
a brochure). Thus, such a document
would be subject to all of the advertising
rules. The Board requests comment on
whether “lobby signs” should be
defined, and if so, how the term should
be defined.
Under the act, the exception applies
to lobby signs designed to be viewed
only from the interior of a depository
institution (or the premises of a deposit
broker). The Board proposes to use the
term "facing inside” the lobby rather
than using an "intent” standard. The
Board believes this will provide a
simpler test for determining if a sign is
exempt under section 230.8(e) or not.
Since the act creates an exemption only
for lobby signs designed to be viewed
from inside an institution, lobby signs
that do not face inside a depository
institution (or the premises of a deposit
broker) would remain subject to the
normal disclosure requirements of this
section.
Technically, the statute could be read
to exempt from the disclosure rules only
those lobby signs that state a rate. The
Board believes the Congress intended to
except these media from the disclosure
provisions in section 263(a) and 263(c)
regardless of whether a rate of return is
stated. Lobby signs would be exempt
from the disclosure requirements under
paragraphs (b), (c) and (d) of § 230.8 if
the signs face inside a depository
institution or the premises of a deposit
broker. This would exempt such lobby
signs from the disclosure rules dealing
with bonuses in § 230.8(d); thus, a lobby
sign could state a "bonus” without
stating any additional disclosures.
Section 263(c) of the act excepts lobby
signs from the "disclosure provisions”
of section 263. A second amendment to
the act exempts lobby signs from
paragraph (a) of section 263, which
deals specifically with “disclosures”
required when rates of earnings are
mentioned hi advertisements. The
proposal would exempt lobby signs
from the disclosure provisions of
section 263, but they would remain
subject to the prohibition on misleading
or inaccurate advertisements. The Board
believes that jf a broader exemption
were intended, the Congress would have
exempted the lobby signs described in
section 263(c) of the act from section
263 entirely. Thus, the Board believes
that lobby signs facing inside an
institution (or the premises of a deposit
broker) are subject to the act’s
prohibitions against the use of
misleading or inaccurate statements in
advertisements, and against the
description of accounts as “free” if a
regular service fee is imposed. As a
result, lobby signs facing inside a
depository institution would be covered
by paragraph (a) of § 230.8. The Board
solicits comment on this proposal.
The amendment to section 263(c) of
the act requires that if any rate is
displayed, the annual percentage yield
must also be stated (but does not
expressly require that the figure be
described as the "annual percentage
yield”). The regulation currently
provides that in all cases, if any rate of
return is advertised, it must be stated as
the annual percentage yield, using that
term or the abbreviation "APY.” The
Board solicits comment on this issue.
(3) Proposed Additional Guidance
Section 230.2(q)—Periodic Statement
The regulation defines a periodic
statement as one sent to a consumer “on
a regular basis four or more times a
year.” The supplementary information
accompanying the final regulation
stated that if an institution provides a
statement to meet other legal
requirements (for example, if an
electronic fund transfer takes place and
the transaction is covered by the Board’s
Regulation E), such a statement is a
periodic statement for purposes of
Regulation DD.
Many institutions have asked whether
every statement sent to meet
requirements of Regulation E is
considered a periodic statement for
purposes of Regulation DD. For
example, Regulation E requires a
statement to be sent for each monthly or
shorter cycle in which an electronic
fund transfer has occurred, but at least
quarterly if no transfer has occurred (12
CFR 205.9(b)). Institutions that provide
regular quarterly statements, and only
provide monthly statements if a transfer
has occurred, have asked whether the
273
monthly statement is a periodic
statement for Regulation DD purposes.
The Board does not believe this
monthly statement is a periodic
statement for Regulation DD. The
statement may or may not be sent on a
monthly basis, depending on whether
an electronic fund transfer actually
occurs that month. Unlike a statement
sent every quarter—or a policy of an
institution in which it sends a statement
on a monthly or other regular basis—the
statement is not sent on a "regular”
basis since an institution may send the
statement one month but not every
month. Thus, the Board believes that
such a statement need not include any
of the disclosures in § 230.6, since it
does not meet the definition of
"periodic statement.”
In such a circumstance discussed
above, however, the quarterly statement
is a periodic statement, and the
disclosures in § 230.6 would have to be
provided for that statement period. The
Board solicits comments on whether
institutions should be exempt from
disclosing fees for a quarterly statement
if they have reflected those fees in the
prior monthly statement, in accordance
with Regulation E.
Appendix A to Part 230—Annual
Percentage Yield Calculation
Proposed Alternative Formula for
Certain Accounts
Part II of appendix A provides
institutions with a single formula to
calculate the annual percentage yield
earned for periodic statements. The
Board has received several inquiries
from institutions about whether this
formula should be used in all situations.
Institutions that use the daily balance
method to accrue interest have noted
that if a periodic statement is sent more
frequently than the period for which
interest is compounded, the annual
percentage yield earned may be higher
than the annual percentage yield.
Institutions have stated that consumers
could be confused or mislead by the
annual percentage yield earned figure.
By way of illustration, an institution
that pays a 5% interest rate and
compounds annually would state an
annual percentage yield of 5%. The
same institution would show $4.11 of
interest accrued on $1,000 of principal
on a monthly periodic statement
(reflecting 30 days). In such a case, the
annual percentage yield earned shown
on that statement would be 5.12%.
Institutions have urged the Board not to
require use of a formula that produces
such a result.
The Board solicits comment on
whether an additional formula should
274
Federal Register / V ol 58, No. 2 / Tuesday, January 5, 1083 / Proposed Rules
be added to Appendix A, Part II, to
calculate the annual percentage yield
earned for those accounts in which
institutions provide periodic statements
more often than they compound
interest The Board also requests'
comment on whether use of any
additional formula should be optional
or required. The definitions that apply
to the existing formula in Appendix A,
Part n would apply to the new formula,
although a definition of “compounding”
would be added, where “compounding”
is the frequency with which interest is
compounded, expressed as a number of
days. (For example, quarterly
compounding would be expressed as
91.25; S8mi-annual compounding would
be expressed as 182.5; and annual
compounding would be expressed as
365.) The Board requests comment on
whether the following formula should
be added:
APY Earned-
which an institution provides a periodic
statement more frequently than it
compounds interest (See the discussion
under § 230.2(q) above, in which the
Board proposes that a statement sent on
a nonregular basis, to meet Regulation E
requirements, is not a periodic
statement for purposes of Regulation
DO.) Finally, several factors may cause
the annual percentage yield earned that
is disclosed on the periodic statement to
be lower than the annual percentage
yield, such as the failure to meet a daily
minimum balance requirement, a
decrease in the interest rate, and use of
a collected balance method of accruing
interest.
Use of “Ledger” and ”Collected”
Balance To Calculate the Annual
Percentage Yield Earned
The Board proposes to address a
second issue in Part Q of Appendix A,
The supplementary information
accompanying the final regulation state
that the annual percentage yield earned
(Interest earned/Balance)
100 ( 1+
reflects the relation between the amount'
Days in period
of interest and the “account balance for
the period reflected on the statement.”
(Compounding)]
(Emphasis added.) The Board has
received numerous questions regarding
To illustrate* in the example
how the balance figure is determined
discussed above, if a consumer earned
when an institution uses a “collected”
$4.11 in interest for a 30-day period on
a $1,000 deposit, the annual percentage balance method of accruing interest (As
was stated in the supplementary
yield earned under the proposed
information accompanying the final
formula would be 5%.
regulation, institutions may accrue
4.11/1,000 \
interest using either the collected or
APY Eamed-100 [!♦
ledger balance method.) Regardless of
30
/ which method is used to accrue interest,
the Board intends for institutions to use
(365))OMO«s>_i
the ledger balance in the account, for
APY Earned=5%
the period reflected on the statement,
for calculating the annual percentage
The Board believes that this second
annual percentage yield earned formula yield earned.
would be used under fairly narrow
The Board believes using the ledger
circumstances. First, the additional
balance for the periodic statement cycle
formula could be used only by those
provides a more accurate yield figure
institutions that calculate interest by
since it demonstrates the difference
using a daily balance method. (Section
between institutions that accrue interest
230.6(b) of the regulation provides a
using a collected balance compared to
special rule for calculating the annual
those that use a ledger balance.
percentage yield earned if institutions
(Assuming that the interest rate and
use the average daily balance method to other conditions remain the same, an
calculate interest.) Second, only
institution using the ledger balance
accounts that provide periodic
method of accruing interest would
statements more often than the
disclose a higher annual percentage
yield earned on the periodic statement
frequency for which interest is
than an institution using a collected
compounded would be affected.
Evidence indicates that the vast majority balance method.) The Board believes it
of NOW and money market accounts— is essential that the annual percentage
typically accounts that provide periodic yield earned be calculated in a
statements on a monthly or quarterly
standardized way to ensure that
basis—compound on a daily or monthly consumers are able to compare returns
basis. Third, given the proposed
on deposit accounts. In addition, the
position regarding the definition of a
Board believes requiring use of a ledger
periodic statement discussed earlier in
balance to calculate the annual
this notice, there may be few cases in
percentage yield earned will minimize
(
compliance costs and burdens on
institutions.
(4) Form o f Comment Letters
As discussed above, comment letters
should refer to Docket No. R-0701. The
Board requests that, when possible,
comments be prepared using a standard
typeface with a type size of 10 or 12
characters per inch. This will enable the
Board to convert the text into machinereadable form through electronic
scanning, and will facilitate automated
retrieval of comments for review.
Comments may also be submitted on
3Va inch or 5*4 inch computer diskettes
in any IBM-compatible DOS-based
format, if accompanied by an original
document in paper form. -■
(3) Econom ic Impact Statement
The proposed change to the regulation
is not likely to have a significant impact
on institutions’ costs, including those of
small institutions.
List o f Subjects in 12 CFR Part 2 30
Advertising, Banks, Banking,
Consumer protection. Deposit accounts.
Interest, Interest rates, Federal Reserve
System, Truth in savings.
Certain conventions nave been used
to highlight the proposed revisions to
the regulation. New language is shown
inside bold-faced arrows, while
language that would be deleted is set off
with bold-faced brackets.
For the reasons set forth in the
preamble, 12 CFR part 230 is proposed
to be amended as follows:
PART 230— TR U TH IN SAVINGS
1. The authority citation for part 230
continues to read as follows:
Authority: 12 U.S.C. 4301 et seq.
2. Section 230.2 would be amended
by revising the last sentence of
paragraph (a) to read as follows:
$23Q£ Definitions.
*
*
*
*
*
(a)
Account * * * The term does not
include an existing account held by an
unincorporated nonbusiness association
of natural persons prior to [March 21J
♦ June 21$, 1993, unless the association
notifies the institution that it meets the
definition of “consumer.”
*
*
*
*
*
3. Section 230.4 would be amended
by revising the first and second
sentences of paragraph (c)(1) to read as
follows:
|230.4 Account disclosures.
* * * * *
(c) N o tic e to e x istin g a cco u n t
h o ld ers —(1) N o tic e o f a v a ila b ility o f
Federal Register / Vol. 58, No. 2 / Tuesday, January 5, 1993 / Proposed Rules
disclosures. Depository institutions
shall provide a notice to consumers who
receive periodic statements and who
hold existing accounts of the type
offered by the institution on [March 21]
♦ June 2 1 |, 1993. The notice shall be
included on or with the first periodic
statement sent on or after [March 21]
♦ June 21{, 1993 (or on or with the first
periodic statement for a statement cycle
beginning on or after that date). * * *
*
*
*
*
*
4. Section 230.5 would be amended
by revising paragraph (a)(2)(ii) to read as
follows:
§ 2 3 0 .5
*
*
S u b s e q u e n t d is c lo s u r e s .
*
*
*
(a) * * *
(2 ) * * *
(ii)
Check printing fees. Changes in
fees assessed (by third parties] for check
printing.
* * * * *
5. Section 230.8 would be amended
by revising paragraph (e) and by adding
a new paragraph (e)(2) to read as
follows:
§ 2 3 0 .8
*
*
A d v ertisin g.
*
*
*
(e)
Exemption for certain
advertisements. i (l ) Certain m edia.i If
an advertisement is made through one
of the following media, it need not
contain the information in paragraphs
(c) (1), (c)(2), (c)(4), (c)(5), (c)(6)(ii),
(d) (4), and (d)(5) of this section:
♦ (i)! [(1 )] Broadcast or electronic
media, such as television or radio;
♦ (ii)! [(2 )] Outdoor media, such as
billboards; !or!
♦ (iii)! [(3 )] Telephone response
machines!-! [; or
(4)
Lobby boards inside a depository
institution or deposit broker (provided
they contain a notice advising
consumers to contact an employee for
further information).]
♦ (2) Lobby signs. Lobby signs facing
inside a depository institution (or facing
inside the premises of a deposit broker)
are not subject to paragraphs (b), (c), or
(d) of this section. If a lobby sign states
a rate of return, it shall:
(i) State the rate as an "annual
percentage yield,” using that term or the
term “APY.” The advertisement shall
not state any other rate, except that the
interest rate may be stated in
conjunction with the annual percentage
yield to which it relates.
(ii) Contain a statement advising
consumers to contact an employee for
further information about applicable
fees and terms.!
By order o f the Board o f G overnors o f the
F ederal R eserve S ystem , D ecem ber 2 9 , 1 9 9 2 .
W illia m W. W iles,
Secretary
of the Board.
[FR Doc. 9 3 - 5 4 F iled 1 - 4 - 9 3 ; 8:45 am)
BILUNG CODE 6210-01-M
275
@FedFRASER