What Is Regulation DD?

Regulation DD is a directive created by the Federal Reserve. It was enacted to fulfill the Truth in Savings Act (TISA) that was passed in 1991, which requires lenders to provide accurate information about fees and interest to account holders when they begin banking with that institution. Regulation DD enforces the distribution of these disclosures.

How Does Regulation DD Work?

Regulation DD only applies to individual accounts, not corporate or other business accounts. The regulation does not apply to credit unions, regardless of the account holder.

The regulation is intended to help consumers when opening savings accounts, checking accounts, money market accounts, certificates of deposit: any kind of account where they decide to deposit their funds.

Regulation DD requires financial institutions to disclose information to account holders regarding annual percentage yield, interest rates, minimum balance requirements, account opening disclosures, and fee schedules. If financial institutions fail to provide these disclosures they can be fined or lose their banking licenses.

What Is the Truth in Savings Act?

The Truth in Savings Act requires depository institutions, such as banks, credit unions, and savings and loan associations, to disclose any fees, interest rates, and other charges assessed to deposit accounts. This includes any fees associated with transactions processed through debit cards linked to savings accounts.

Does Regulation DD Apply To Credit Cards?

No. Regulation DD and the Truth in Savings Act apply only to deposit accounts and their linked debit cards.

There are separate regulations that apply to credit disclosures, like the Truth in Lending Act (TILA). The TILA works alongside the TISA to keep borrowers and depositors fully aware of updated processes where they bank.

In addition, the Truth in Lending Act limits the information that can be advertised by lending companies in order to prevent lenders from presenting false information about credit terms.

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Rachel Siegel, CFA
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