§4302 — Title 12 Banks and Banking | U.S. Code

Summary

Banks and deposit brokers must tell people key facts when they advertise a specific interest rate for an account. Ads must show the annual percentage yield (APY), how long that APY lasts, any minimum balance or time rules needed to get the rate (and if more than one rate is shown, each rate must list its matching balance nearby), the smallest initial deposit to open the account if that amount is bigger than the balance needed to earn the rate, a note that fees or other conditions can lower the return, and a note that taking money out early can lead to an interest penalty. The Consumer Financial Protection Bureau can allow some radio, TV, online, or outdoor ads to skip the initial-deposit or fee note if it would be too hard to include. Signs on bank property only need to show the APY and tell customers to ask staff for details. Ads may not call an account "free" if customers must keep a minimum balance, limit transactions, or pay regular fees. Ads must not be false or misleading.

Title 12, §4302

Banks and Banking — Source: USLM XML via OLRC

(a)Except as provided in subsections (b) and (c), each advertisement, announcement, or solicitation initiated by any depository institution or deposit broker relating to any demand or interest-bearing account offered by an insured depository institution which includes any reference to a specific rate of interest payable on amounts deposited in such account, or to a specific yield or rate of earnings on amounts so deposited, shall state the following information, to the extent applicable, in a clear and conspicuous manner:

(1)The annual percentage yield.

(2)The period during which such annual percentage yield is in effect.

(3)All minimum account balance and time requirements which must be met in order to earn the advertised yield (and, in the case of accounts for which more than 1 yield is stated, each annual percentage yield and the account minimum balance requirement associated with each such yield shall be in close proximity and have equal prominence).

(4)The minimum amount of the initial deposit which is required to open the account in order to obtain the yield advertised, if such minimum amount is greater than the minimum balance necessary to earn the advertised yield.

(5)A statement that regular fees or other conditions could reduce the yield.

(6)A statement that an interest penalty is required for early withdrawal.

(b)The Bureau may, by regulation, exempt advertisements, announcements, or solicitations made by any broadcast or electronic medium or outdoor advertising display not on the premises of the depository institution from any disclosure requirements described in paragraph (4) or (5) of subsection (a) if the Bureau finds that any such disclosure would be unnecessarily burdensome.

(c)The disclosure requirements contained in this section shall not apply to any sign (including a rate board) disclosing a rate or rates of interest which is displayed on the premises of the depository institution if such sign contains—

(1)the accompanying annual percentage yield; and

(2)a statement that the consumer should request further information from an employee of the depository institution concerning the fees and terms applicable to the advertised account.

(d)No advertisement, announcement, or solicitation made by any depository institution or deposit broker may refer to or describe an account as a free or no-cost account (or words of similar meaning) if—

(1)in order to avoid fees or service charges for any period—

(A)a minimum balance must be maintained in the account during such period; or

(B)the number of transactions during such period may not exceed a maximum number; or

(2)any regular service or transaction fee is imposed.

(e)No depository institution or deposit broker shall make any advertisement, announcement, or solicitation relating to a deposit account that is inaccurate or misleading or that misrepresents its deposit contracts.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Subsec. (b). Pub. L. 111–203 substituted “Bureau” for “Board” in two places. 1996—Subsec. (c). Pub. L. 104–208 redesignated par. (1) as entire subsec. (c) and subpars. (A) and (B) of former par. (1) as pars. (1) and (2), respectively, and struck out former par. (1) heading and heading and text of former par. (2). Text of former par. (2) read as follows: “For purposes of paragraph (1), a sign shall only be considered to be displayed on the premises of a depository institution if the sign is designed to be viewed only from the interior of the premises of the depository institution.” 1992—Subsec. (a). Pub. L. 102–550, § 957(a)(1), substituted “subsections (b) and (c)” for “subsection (b)”. Subsecs. (c) to (e). Pub. L. 102–550, § 957(a)(2), (3), added subsec. (c) and redesignated former subsecs. (c) and (d) as (d) and (e), respectively.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

§4302 Disclosure of Interest Rates and Terms of Accounts