Federal Reserve Regulations Impacting Cash Managers (2)
September 3, 2009 – 1:45 amM
Consumer Leasing. Implements the consumer leasing provisions of the Truth in Lending Act by requiring meaningful disclosure of leasing terms.
P
Privacy of Consumer Financial Information. Implements the provisions of the Gramm-Leach-Bliley Act that prohibits a financial institution from disclosing nonpublic personal information to third parties that are not affiliated with the financial institution.
Q
Prohibition against Payment of Interest on Demand Deposits. Prohibits member banks from paying interest on demand deposits. The DIDMCA lifted this restriction in 1986 from all parties except corporations. It is expected that the remaining provisions will be phased out in the near future.
Y
Bank Holding Companies and Change in Bank Control. Governs the bank and nonbank expansion of bank holding companies, the divestiture of impermissible nonbank interests, the acquisition of a bank by individuals, and the establishment and activities of financial holding companies.
Z
Truth in Lending. Prescribes uniform methods for computing the cost of credit for disclosing credit terms and for resolving errors on certain types of credit accounts. The amendments in 2001 added provisions to implement the Home Ownership and Equity Protection Act of 1994.
AA
Unfair or Deceptive Acts or Practices. Establishes consumer complaint procedures and defines unfair or deceptive practices in extending credit to consumers.
CC
Availability of Funds and Collection of Checks. Establishes availability schedules, as provided in the EFAA, under which depository institutions must make funds deposited into transaction accounts available for withdrawal. The regulation also provides that depository institutions must disclose their funds availability policies to their customers. In addition, Regulation CC establishes rules designed to speed the collection and return of checks and imposes a responsibility on banks to return unpaid checks expeditiously. The provisions of Regulation CC govern all checks, not just those collected through the Federal Reserve System.
DD
Truth in Savings. Requires depository institutions to provide disclosures to enable consumers to make meaningful comparisons on deposit accounts.
Source: The Federal Reserve Board: Regulations, May 15, 2002.
Exhibit 8.4: Summary of Federal Reserve Regulations
Although interest cannot be paid on the corporate DDA, banks will allow an “earnings credit” to be offset against service charges based on the level of balances in the account.
Taken From : Essentials of Managing Corporate Cash
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