Truth in Savings Act

Summary

Truth in Savings Act - Declares that economic stability would be enhanced and competition among savings institutions improved by full disclosure of the terms and conditions under which earnings on savings deposits are payable. Declares that the purposes of this Act to be the meaningful disclosure of terms and conditions of the payment of earnings on individual savings deposits. Establishes definitions for such pertinent terms as "Board", "individual", "individual savings deposit", "earnings", "payable", and "savings institution", so as to make the Act applicable to consumer deposits in savings institutions. Excludes deposits of funds in excess of $25,000 and funds placed with concerns which are not in normal usage considered to be savings institutions from the provisions of this Act. Excludes any obligation issued by any Federal, State or local government, or any agency, instrumentality, or authority thereof, except that the Federal Reserve Board may issue regulations to require disclosures by any agency, instrumentality, or authority of the Federal Government. Establishes a method to determine annual percentage rate, periodic percentage rate, and annual percentage yield. Confers on the Federal Reserve Board authority to issue appropriate regulations which provide for uniform disclosures and regulations as the Board determines are necessary. Establishes disclosure requirements to be applied to any individual at a time before he initially places funds in an individual savings deposit in a savings institution including: (1) the annual percentage rate; (2) the minimum length of time a deposit must remain on deposit so that earnings are payable that percentage rate; (3) the annual percentage yield; and (4) the periodic percentage rate and the method used to compute the balance to which this rate will be applied. Establishes disclosure requirements to be applied to the current depositors of a savings institution. Authorizes the Federal Reserve Board to establish additional disclosure requirements. Requires a savings institution to notify its depositors 10 days in advance of any change in policy or procedure with respect to any item of information required to be disclosed. Requires advertisements relating to the earnings payable on an individual savings deposit to state with equal prominence the annual percentage rate and the annual percentage yield. Prohibits any indication of any percentage rate or percentage yield based on a period in excess of one year or based on the effect of any grace period. Establishes the governmental agencies which have responsibility for enforcing compliance with the requirements of this Act. Confers on individual depositors the right to a full return of his deposit with earnings therein at the advertised annual percentage rate until midnight of the thirtieth day following the making of that deposit or the delivery of the disclosure requirements of the Act, whichever is later. Establishes civil liability on a savings institution which fails to comply with this Act to be twice the amount of the interest in connection with the transaction (with a minimum liability of $100 and a maximum liability of $1,000) and, in the case of any successful action to enforce the foregoing liability, court costs and attorney's fee. Permits a savings institution to avoid liability if it notifies individuals of errors within 15 days of discovery or if a preponderance of evidence shows that error was unintentional and resulted from a bona fide error. Provides a maximum $5,000 fine for the willful and knowing violation of the requirements of the Act. Authorizes the Board to obtain the view of any other Federal or State agency exercising regulatory or supervisory functions with respect to any class of savings institutions subject to this Act. Provides for the continued validity of the remainder of this Act should any provision be held invalid.

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1 official file

• Introduced in House

  summary · EN · 21 March 1973

  Open at official source

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