Summary of Program
Interest Checking and Non Interest Checking Accounts can be restructured
so that a certain portion of each account is maintained in a linked
Savings sub-account. The Savings portion of the total account balance
is not subject to a 10% reserve requirement at the Federal Reserve
Bank. Funds are automatically transferred to the transaction portion of
the combined account on a daily basis if required to cover check
activity within the transaction portion of the account. Concurrent with
the sixth such transfer during a calendar month, the entire balance is
transferred to the transaction portion to remain in compliance with
Regulation D.
This change will be transparent to the customer and will not affect
their statement or any terms and conditions of their existing account.
Status
We
have received confirmation from the Federal Reserve Bank that they have
no objection of our intent to move forward with this modification.
Several banks in our market area have implemented this modification.
Systems and Accounting are in the process of developing the required
systems modifications. It will be transparent to the customer.
We
have worked with Compliance to determine the form and manner of
disclosure to our existing and new account holders. This will take the
form of a statement insert for existing accounts and an additional
paragraph in our Deposit Terms and Conditions for new accounts.
Questions and Answers
Potential customer
service questions and answers have been attached for review and
distribution to the customer service individuals. Experience from other
organizations indicates that few, if any, responses will be received
from our customer base.
Potential
Questions and Answers for Customer Service
Q:
What are you doing to my account? Why are you doing this?
A: Under
federal law, we are required to classify our deposits a certain way for
regulatory reporting purposes. We are simply changing the way we report
deposit accounts to the government and the government requires that we
notify you of this change. It does not affect you in any way.
Q:
Has my
availability of funds been changed?
A: No, funds are still immediately
available from Non Interest Checking Accounts.
Q: Is my
account still insured by FDIC?
A: The FDIC
insurance on your account will remain as it is today.
Q: Okay,
how is Bloomfield State Bank benefiting?
A: This change will lower the
amount of funds that we have to keep on deposit at the Federal Reserve
Bank, providing more funds for lending and investment purposes.
Q: Will
you adjust my analysis credit rate or change my marginal reserve
requirement on analyzed business account?
A: No, our already competitive
analysis prices will be unchanged. This change is allowing these prices
to remain competitive. The marginal reserve requirement will remain
because our marginal reserve requirement is unchanged.
Q: Will
you increase your rate on my Interest Checking Account?
A: No, but
the change will allow us to continue to pay competitive rates on all of
our deposit products.
Q: Will
my fees go up?
A: No, this
change will not affect your account in any way.
Q: Will
you pay interest on my corporate account?
A: No,
federal law precludes us from paying interest on your regular corporate
checking accounts. |
