Regulation DD: What It Is and How It Works

Key takeaways
* Regulation DD implements the Truth in Savings Act to promote transparency and comparability of deposit accounts.
* It requires depository institutions to disclose key terms—APY, interest rates, fees, minimum balances, and other terms—in a clear, conspicuous, and retainable form.
* The rule covers consumer (individual) deposit accounts but not corporate/organizational accounts, credit unions, or non‑bank institutions.
* Advertising and disclosure rules prevent misleading statements and require advance notice (typically 30 days) for adverse changes to account terms.

What Regulation DD covers
* Purpose: Help consumers compare deposit accounts and make informed choices by standardizing disclosures.
* Covered accounts: consumer savings and checking accounts, money market accounts, certificates of deposit (CDs), variable‑rate accounts, and accounts denominated in foreign currency.
* Who is covered: depository institutions (banks and similar entities). Credit unions and non‑banks generally are not required to follow Regulation DD.

Required disclosures
Depository institutions must provide disclosures that are:
* Clear and conspicuous, reflecting the legal terms of the account agreement.
* Provided in a form consumers can keep (paper or electronic with consumer consent).

Disclosures must address:
* Annual Percentage Yield (APY) and interest rate information.
* Minimum balance requirements and fee schedules.
* Account opening procedures and other material terms.
* Timing: at account opening, upon consumer request, when terms change, and at account maturity.

Advertising rules
* Advertisements for deposit accounts (including those by deposit brokers) must not be misleading or inaccurate.
* Ads may not use the word “profit” to describe interest paid on accounts.
* Any advertised rates or terms must reflect the actual contract terms.

Amendments and specific rules
* Overdrafts and fees: Amendments require clearer, uniform disclosure of overdraft and returned‑item fees and aggregate overdraft costs on periodic statements.
* Automated systems: Balance disclosures provided through ATMs or phone systems must meet clarity requirements.
* Notice of changes: For changes unfavorable to the consumer (e.g., fee increases), institutions typically must give at least 30 days’ advance notice. Favorable changes generally require no notice unless they are temporary.

Preemption and enforcement
* Regulation DD implements federal Truth in Savings requirements; state laws inconsistent with Regulation DD/TISA are preempted to the extent of the inconsistency.
* The Consumer Financial Protection Bureau handles preemption determinations and related guidance.

Bottom line
Regulation DD standardizes disclosures about consumer deposit accounts so individuals can compare rates, fees, and terms across institutions. It mandates clear, retainable disclosures and restricts misleading advertising, improving transparency and helping consumers make better banking choices.