Truth In Savings/NCUA Part 707 Flashcards
When opening a joint share account, should the account disclosures be given to each joint member or is it sufficient to give the disclosures to one of the members?
The account disclosures can be given to any one of the account holders
Name the five different points in the lifecycle of a deposit account where TIS imposes special disclosure requirements.
Pre-account opening account opening, periodic statements, changes in account terms, and account, maturity, and advertising
The initial account disclosures must include eight categories of information list four of those categories
Initial account disclosure should include APY and dividend rate compounding and creating policies, balance, information, fees, transaction limitations, nature of dividends, features of term, share accounts, and bonuses
Defined the term dividends
Dividends, declare, or prospective earnings on a members shares in a credit union to be paid to a member or a members account, excluding bonuses extraordinary dividends, or similar incentives
What TISA disclosure is required in all oral rate disclosures account, disclosures and advertisements for deposit accounts
The annual percentage yield
TIS defines the exact form the dividend rate must be in for all disclosures and advertisement. What is that form?
It must be rounded to the nearest basis point .01 and disclosed to two decimal places.
Explain the difference between the annual percentage yield APY, and the annual percentage yield earned APYE
Annual percentage yield APY, the percentage rate, reflecting the total amount of dividends, paid on an account based on the dividend rate, and the frequency of compound in for a 365 day period for share, and share draft accounts, or for the term of the account for term share accounts. The APY assumes the principal amount remains in the account for 365 days or the term of the account.
Annual percentage yield earned APYE reflects the total amount of dividends actually earned for the dividend or statement. As a percent of the actual average daily balance in the account, the APYE is affected by additions and withdraws during the period and is required for periodic statements only.
List the two methods of dividend calculation allowed by TIS and briefly describe how each one works
Daily balance method-a daily periodic rate is applied to the exact daily balance in the account for each day
Average daily balance method-The balance for each day is added together. This figure is divided by the number of days in the period and the periodic rate is applied to this figure
The dividend, nonpayment rules outline four instances when credit unions are not required to pay dividends list three of them
During the grace period of a roll over term share account, after maturity for a non-rollover term share account, funds remaining in a closed account, and the time which checks are return unpaid
Does NCUA maintain a particular frequency for compounding and credit idividends?
No, they only require that the frequency be stated in the account disclosures
If your credit Union provides TIS account disclosures electronically the member must first provide their affirmative consent to receive electronic disclosures before the credit union accepts that consent the member must receive a written disclosure containing specific information. What two pieces of information must be included in that disclosure.
The disclosure must inform members of their rights as they relate to electronic disclosures and provide the hardware and software requirements for accessing and retaining the disclosures
If members can open accounts online at what point in the process must they receive the TIS account disclosure?
The member must be required to access the account disclosure before the account is opened or the services are provided, which ever is earlier
Name the four major items TIS requires on periodic statements
The annual percentage yield earned the amount of dividends/interest earned any fees imposed, and the number of days in the period
When is a change in terms notice required
Affected members must be sent a change in terms notice whenever there will be a change in any terms required in the initial TISA account disclosure. If that change may reduce the APY or adversely affect the member. The notice must be mailed 30 days before the change goes into effect.
If an advertisement mentions an APY, what other disclosures must be shown clearly and conspicuously
Variable rate accounts- the fact that the rate may change after the account is open
Time the APY is available -1. Four dividend Barron accounts except term share accounts a statement that the APY is accurate as of the last dividend declaration date or that the disclosed prospective APY is accurate or 2. For interest-bearing accounts and dividend-bearing term share accounts. The period the APY is offered for their account or a statement that the APY is accurate as of a specified date.
Minimum balance required to obtain the advertised APY
Minimum opening deposit, if it is greater than the minimum balance necessary to obtain the advertised APY
Effect of fees - a statement that fees could reduce earnings. If my maintenance or activity fees could be imposed that would reduce earnings.
Features of term share accounts, the term of the account in a statement that a penalty will, or may be imposed for early withdrawal
When opening a term share account, what is the correct APY and dividend rate that must be quoted to the member
The rate and the APY that is being offered, that day must be disclosed to the member
There are four types of balance disclosures that must be included in the account disclosures. One of those is the minimum balance required to open the account avoid fee and obtain the disclosed APY. What are the other three required balance disclosures?
The other balance disclosures are 1. The balance computation method used to figure dividends. 2. And explanation of how the minimum balance is determined and 3. The membership share par value.
All credit unions must disclose on periodic statements, a total dollar amount for all_____ And____ Fees, imposed on a members account for the_____ and_____
All credit unions must disclose on periodic statements, a total dollar amount for all overdraft fees and return items NSF fees imposed on a members account for the statement period and for the calendar year to date.
What does NCUA’s part 707 prohibit the credit union from displaying on an ATM screen website or telephone response system
When displaying available, balance information on a ATM screen website or telephone response system, NCUA’s part 707 prohibits a credit union from, including any additional amounts that may be provided through overdraft protection, plans, lines of credit or through transfers from other accounts
