N.Y. Comp. Codes R. & Regs. tit. 3 § 13.7

Current through Register Vol. 46, No. 51, December 18, 2024

Section 13.7 - Disclosure of information for variable rate deposits or money market deposits

(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.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 13.7