Can Checking Account Statements be Combined?

Inquiry/Issue

Bank is presently providing a combined statement for accounts with the same owner, when the owner has opted-in to receiving such statements. It would like to provide combined statements whether or not the owner has opted-in.

Response Summary

The Bank can provide combined periodic statements for accounts with the identical customer, provided that the disclosure requirements for periodic statements under Regulations DD and E and complied with for each account. There would be no requirement for the customer opting-in or for providing prior notice, though as a matter of best practice, the Bank should provide notice in advance, as in a clear and conspicuous notice in the periodic statement.

Response Detail

Under Regulation DD, a “periodic statement” is a statement setting forth information about an account, other than a time account or a passbook savings account, that is provided to a consumer on a regular basis four or more times a year. 12 CFR §1030.2(q).

Regulation DD provides that if an institution mails or delivers a periodic statement for a deposit account, the statement must include the following information:

• Annual percentage yield;
• Amount of interest;
• Fees imposed;
• Length of the statement period; and
• Aggregate fee disclosure.

The Official Commentary states that institutions are not required to provide periodic statements, but that if they do, they must make these disclosures to the extent applicable. There is no requirement for the customer to opt-in to the periodic statement. 12 CFR §1030.6(a); Official Commentary §1030.6(a)-1.

There is little official guidance regarding combined statements. Regulation Z permits periodic statements for open-end credit to be combined with those for deposit accounts. 12 CFR §1026.7(b)(13).
With regards combined periodic statements for deposit accounts, the Official Interpretations to Regulation DD states that institutions may provide information about an account on the periodic statement for another account without triggering disclosures required for periodic statements, as long as:

• The information is limited to the account number, the type of account, or balance information; and
• The institution also provides a periodic statement for that account complying with the disclosure requirements. Official Interpretations, §1030.6(a)-3.

Since the Bank wants to provide a combined statement for all of the deposit accounts of a customer, the information provided for each account cannot be limited to the information allowed for “combined statements” under Regulation DD. Instead, the information provided for each account will trigger the disclosures of the regulation for periodic statements. This means that, while the Bank will be combining the statements for all of the accounts, the information provided for each account must satisfy the periodic statement requirements of Regulation DD.

Regulation E also requires periodic statements to be provided for each monthly cycle in which an electronic transfer has occurred or at least on a quarterly basis, if no such transfer has occurred. The statement must provide the following information:

• Transaction activity (e.g., amount, date, and type of transfer);
• Account number;
• Fees;
• Account balances;
• Address and telephone number for inquiries (with language, “Direct inquiries to”);
• Telephone number for pre-authorized transfers (if institution offers this option).

For the purpose of Regulation E, disclosures in the periodic statement need only be given to the extent applicable. There is no reference or guidance with regards combined statements. Consequently, the Bank should interpret the periodic statement requirements of the regulation as pertaining to each account, in that appropriate disclosures should be given for each account from which electronic fund transfers can be made.12 CFR §1005.9(b); Official  Interpretations, §1005.9(b)-5.

The Bank is also required under Regulation E to provide an error resolution notice at account opening or before an electronic fund transfer is made. Thereafter, the notice can be given annually or in a short form with each periodic statement. 12 CFR §1005.8(b).

In providing combined periodic statements under Regulation DD and Regulation E, we would recommend that the Bank do the following:

• Provide combined periodic statements only where the owner is identical for each account;
• Comply with the disclosure requirements of the regulations for each account;
• Develop and implement guidelines for combined statements.
• Include the provision for combined periodic statements in the account agreement.

We do not believe that it will be necessary for customers to “opt-in” to receiving combined statements, but can be done as a matter of Bank policy. Since periodic statements are not among the required account opening disclosures of Regulations DD or E, there is no requirement for a waiting period before implementing the change. As a matter of best practice, however, notice should be given to customers prior to doing so, as in a clear and conspicuous notice in the periodic statement.

This entry was posted on Monday, May 18th, 2015 at 3:36 pm.