Current through Register Vol. 46, No. 12, March 20, 2024
(a) This section
contains the sole informational and disclosure requirements for variable rate
deposits or money market deposits (i.e.,savings or time deposits with interest
rates which vary during the term or duration of the deposit), to the exclusion
of the provisions of sections
13.2
and
13.5
of this Part except as expressly provided herein.
(b) Disclosures for variable rate deposits or
money market deposits may be provided in a separate document for each type of
account. The following provisions apply:
(1)
The disclosures shall contain the items listed in section
13.4
or
13.5
of this Part, to the extent such items are applicable to any specific account,
except that:
(i) no reference may be made to
a periodic percentage rate;
(ii) no
statement may be made of an annual percentage yield unless the statement is
accompanied by a disclosure which indicates the hypothetical nature of the
yield statement and which discloses the period of time during which the
interest rate used to determine the annual yield will remain in effect;
and
(iii) only the annual interest
rate in effect on the date that the disclosure statement is distributed shall
be provided, but the disclosure shall include the date up to which or period
for which such rate shall apply and the frequency of rate adjustment
thereafter.
(2) The
disclosure statement shall identify the index, formula or schedule to be used
in calculating rate changes or, if none of the above is applicable, the
disclosure shall state so and generally describe the method to be used in
calculating the rate changes for the account.
(3) Where the annual interest rate in effect
on the date that the disclosure statement is distributed exceeds the rate which
would otherwise have applied under the index, formula or other method of
interest rate calculation employed by the banking institution, that fact should
be clearly disclosed.
(c) The following informational items are
required in connection with variable rate deposits or money market deposits:
(1) upon request, the banking institution
shall provide the date on which the account started to earn interest and the
rate in effect for the account on that date; and
(2) the banking institution shall provide
sufficient information to allow the depositor to independently calculate the
interest yield on the deposit, based on the history of the account (e.g., the
daily interest rate factor to be applied to the principal amount for each
period that a specific rate was in effect and the dates on which accumulated
interest was added to principal for purposes of compounding). Such information
may be provided in such form as the banking institution shall determine to
accomplish the purposes of this provision. Such information must be available
from one of the banking institution's offices located in the State of New York,
upon written or phoned request.
(d) Included with each regular account
statement sent to depositors by a banking institution, either appearing on the
statement or a separate sheet, shall be a notice of the annual interest rate or
rates in effect during the period covered by the statement and the dates when
each such rate was in effect.
