Compliance Q&A: Reg DD and Advance Notice

Q: We’re going to be changing our disclosures in a way that we believe would require us to give a 30-day advance notice under Regulation DD.  I know that Reg DD applies to consumers, but what about consumers that have DBA accounts?

A: You are correct that Regulation DD applies only to consumer accounts, and although DBA/Sole Proprietorship accounts are held by consumers, the commentary to the regulation clarifies those accounts held by individuals as sole proprietors are not covered under Regulation DD.  As a result of that, disclosures relating to sole proprietorship account that are changing would not be required by regulation to be given on any timing schedule, and instead, you’d follow your account agreement as to how and when the bank will provide updated disclosures.

“(a) Account means a deposit account at a depository institution that is held by or offered to a consumer. It includes time, demand, savings, and negotiable order of withdrawal accounts…”

12 CFR 1030.2(a)

“3. Sole proprietors. Accounts held by individuals as sole proprietors are not covered.”

Commentary to 12 CFR 1030.2(h)-3

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