Change-in-Terms Notices

You must send a notice of change to the consumer whenever you make certain changes in your EFT services. In particular, the notice requirement applies to a change in any term or condition that you are required to disclose on your initial disclosure and that results in increased fees or charges, increased liability for the consumer, fewer types of available electronic funds transfers, or stricter limitations on the frequency or dollar amounts of transfers. The notice must be in writing and must be mailed or delivered at least 21 days before the effective date of the change. [12 CFR 1005.8(a)(1)] However, if the change must be made immediately for security reasons, you do not need to give prior notice; but if the change is going to be permanent, you must give notice of the change on or with the next periodic statement or within 30 days of the change. [12 CFR 1005.8(a)(2)]

No particular form is required for this notice, and you can simply send out copies of your new initial disclosure if you point out which terms have been changed. You can also put the change-in-terms notice on a periodic statement. [Commentary, 12 CFR 1005.8(a)-1] See the earlier section in this chapter entitled “Special rules for electronic disclosures” for details on sending this notice by electronic communication.

If security considerations kept you from disclosing on your initial disclosure the daily ATM withdrawal limitation amount, then a change making those limits stricter does not require a change-in-terms notice if secrecy is still essential. However, if you have not imposed withdrawal limits at all, and, therefore, your disclosure does not disclose any limits, you must give notice of the existence of the limits when you decide to impose them even if you cannot disclose the amount of the limits because of security problems. [Commentary, 12 CFR 1005.8(a)-2]