Truth in Savings; Garnishments
Posted by Anthony Demangone
April showers bring May flowers.
It's May. Â Bring on the flowers, already. Â If your April weather was like D.C.'s, I've seen enough showers to last me quite a while.
Truth in Savings.  Hat tip to Fred B. for forwarding this item to my attention.  The Massachusetts Division of Banks recently issued an "industry letter" regarding Truth in Savings.   In short, the industry letter gave two examples of deposit account advertisements that it felt violated both Truth in Savings regulation and a section of Massachusetts law that prohibits unfair an deceptive transactions.  (I'm not so worried about the Massachusetts law, as NCUA has concluded that it is preempted in most cases.)
What caught my attention is this: I've been waiting for greater regulatory attention on share accounts. Â It looks like it has begun. Â The Massachusetts letter clearly shows that regulators are worried about advertisements that violate the letter and spirit of the law. Â Not too long ago, PIRG issued a report also pointing out what it alleges to be Truth in Savings violations.Â
As it becomes ever more difficult to navigate lending regulations in a compliant and easily-profitable way, I know that many financial organizations are looking to the share/deposit side of their products. Â Fees may be tweaked. Â Ad campaigns will be launched. Â I would just note that we're long overdue for close scrutiny on that side of the product sheet. Â You've been warned.Â
Garnishments. Â Since May 1 has come and gone, the "Garnishment of Accounts Containing Federal Benefit Payments"Â regulation is now in effect.Â
- Here's a link to NAFCU's overview of the new regulation. (NAFCU members only.)
- Here's a link to the final rule.Â