Truth in Savings, 12 CFR Part 707

National Credit Union Administration

Pt. 707, App. B

APY Earned = 5.00%.

[58 FR 50445, Sept. 27, 1993, as amended at 63 FR 71575, Dec. 29, 1998]

APPENDIX B TO PART 707—MODEL
CLAUSES AND SAMPLE FORMS
Table of Contents
B–1—Model Clauses for Account Disclosures
(§ 707.4(b))
B–2—Model Clauses for Changes in Terms
(§ 707.5(a))
B–3—Model Clauses for Pre-Maturity Notices
for Term Share Accounts (§ 707.5(b-d))
B–4—Sample Form (Signature Card/ Application for Membership)
B–5—Sample Form (Term Share (Certificate)
Account)
B–6—Sample Form (Regular Share Account
Disclosures)
B–7—Sample Form (Share Draft Account
Disclosures)
B–8—Sample Form (Money Market Share
Account Disclosures)

balance/ average daily balance]’’). It should
be noted that only in sections B–6 through
B–10 of this appendix have specific examples
of disclosures been given, with dates and figures. Sections B–1 through B–5, and section
B–11 provide only unspecific model clauses or
blank forms. The Board felt, as articulated
in the appendix A to Regulation DD, that a
mix of blank clauses and forms and application of the model clauses to real specific situations would benefit those who must comply with TISA.
Any references to NCUA Rules and Regulations, the NCUA Standard FCU Bylaws, or the
NCUA Accounting Manual for FCUs, are provided for guidance and as a point of reference
for credit unions. Citations to these sources
does not indicate that their application is required for those credit unions who need not
follow them.
B–1 MODEL CLAUSES FOR ACCOUNT
DISCLOSURES (§ 707.4(B))

B–9—Sample Form (Term Share (Certificate)
Account Disclosures)

(a) Rate Information (Sec. 707.4(b)(1))

B–10—Sample Form (Periodic Statement)

(i) Fixed-Rate Accounts (§ 707.4(b)(1)(i)(A–B))

B–11—Sample Form (Rate and Fee Schedule)
B–12 Aggregate Overdraft and Returned Item
Fees Sample Form

kpayne on VMOFRWIN702 with $$_JOB

GENERAL NOTE: Appendix B contains model
clauses and sample forms intended for optional use by credit unions to aid in compliance with the disclosure requirements of
§§ 707.4 (account disclosures), 707.5 (subsequent disclosures), 707.6 (statement disclosures), and 707.8 (advertisements). Section
269(b) of TISA provides that credit unions
that use these clauses and forms will be in
compliance with TISA’s disclosure provisions.
As discussed in the supplementary information to § 707.3(a), this final rule provides
for flexibility in designing the format of the
disclosures. Credit unions can choose to prepare a single document or brochure that incorporates disclosures for all accounts offered, or to prepare different documents for
each type of account. Credit unions may also
use inserts to a document, or fill in blanks to
show current rates, fees and other terms.
In the model clauses, words in parentheses
indicate the type of disclosure a credit union
should insert in the space provided (for example, a credit union might insert ‘‘July 23,
1995’’ in the blank for a ‘‘(date)’’ disclosure).
Brackets and ‘‘/’’ indicate that a credit union
must choose the alternative that best describes its practice (for example, ‘‘[daily

1. Interest-bearing Accounts
The interest rate on your deposit account
is lll% with an annual percentage yield
(APY) of lll%. [For purposes of this disclosure, this is a rate and APY that were offered within the most recent seven calendar
days and were accurate as of (date). Please
call (credit union telephone number) to obtain current rate information.] You will be
paid this rate [for (time period)/until (date)/
for at least 30 calendar days].
NOTE: This provision reflects an accurate
statement for an interest-bearing account
authorized by state law for state-chartered
credit unions. While the definition of the
term ‘‘interest’’ permits its substitution for
the term ‘‘dividends,’’ separate disclosures
should be made for interest-bearing accounts. Since account opening disclosures
may be provided to potential members requesting account information before opening
an account, and members opening new accounts, information is provided indicating
that the rate may not be current, but that
the potential member or member may call
the credit union to obtain up-to-date information. When opening a new account, of
course, a credit union could provide the contractual rate alone, and delete the sentences
in brackets. Given the definition of fixedrate account in § 707.2(n), credit unions offering fixed-rate accounts must contract to

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Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)

hold rates steady for at least a 30-day period.
Thus, if the 30-day option of the last sentence is not chosen, the period chosen must
be longer than 30 days.
2. Dividend-bearing Term Share Accounts
The dividend rate on your term share account is lll% with an annual percentage
yield (APY) of lll%. [For purposes of this
disclosure, this is a rate and APY that were
offered within the most recent seven calendar days and were accurate as of (date).
Please call (credit union telephone number)
to obtain current rate information.] You will
be paid this rate [for (time period)/until
(date)/for at least 30 calendar days].
NOTE: This provision reflects an accurate
statement for a fixed-rate, dividend-bearing
term share account. Interest-bearing term
share accounts would use the disclosure in
§ 1, above. Since account opening disclosures
may be provided to potential members requesting account information before opening
an account, and members opening new accounts, information is provided indicating
that the rate may not be current, but that
the potential member or member may call
the credit union to obtain up-to-date information. When opening a new account, of
course, a credit union could provide the contractual rate alone, and delete the sentences
in brackets. Given the definition of fixedrate account in § 707.2(n), credit unions offering fixed-rate accounts must contract to
hold rates steady for at least a 30-day period.
Thus, if the 30-day option of the last sentence is not chosen, the period chosen must
be longer than 30 days.
3. Other Dividend-bearing Accounts

kpayne on VMOFRWIN702 with $$_JOB

[As of [the last dividend declaration date/
(date)], the dividend rate was lll% with
an annual percentage yield (APY) of lll%
on your account. /or The prospective dividend rate on your account is lll% with a
prospective APY of lll% for the current
dividend period.] You will be paid this rate
for [(time period)/at least 30 calendar days].
or
[As of [the last dividend declaration date/
(date)], the dividend rate was lll% with
an annual percentage yield (APY) of lll%
on your account. /or The prospective dividend rate on your account is lll% with an
annual percentage yield (APY) of lll% for
this dividend period.] This rate will not
change unless the credit union notifies you
at least 30 calendar days prior to any change.
NOTE: Credit unions may disclose the dividend rate and annual percentage yield on accounts as of the last dividend declaration
date. This necessitates inclusion of a disclosure of the actual calendar date of the last
dividend declaration date. Additionally or
alternatively (if the last dividend rate could

be inaccurate), credit unions may disclose a
prospective dividend rate and a prospective
annual percentage yield. Such prospective
rates and yields must be estimated in good
faith, and must be declared at the proper
time if it is at all possible to do so. As for
the last sentence in these disclosures, this
provision reflects a credit union policy to set
prospective dividend rates for the next
month (or at least 30 days), quarter or other
period. Many credit unions, at their midmonthly board meeting, set prospective dividend rates for the next month beginning on
the 1st day of the month and continuing to
the last day of the month. These rates must
be formalized or ratified at the end of a dividend period. Given the timing of the board
meetings, the time to prepare and mail notices and the 30 day period, it will often take
credit unions 45 to 60 days to effectively
change rates. For these reasons, the Board
strongly suggests that credit unions do not
offer fixed-rate, dividend-bearing accounts.
(ii) Variable-Rate Accounts (§ 707.4(b)(1)(ii))
1. Interest-bearing Accounts
The interest rate on your deposit account
is lll%, with an annual percentage yield
(APY) of lll%. [For purposes of this disclosure, this is a rate and APY that were offered within the most recent seven calendar
days and were accurate as of (date). Please
call (credit union telephone number) to obtain current rate information.] The interest
rate and annual percentage yield may
change every (time period) based on [(name
of index)/the determination of the credit
union board of directors]. The interest rate
for your account will [never change by more
than lll% each (time period)/never be less/
more than lll%/never exceed lll%
above or fall more than lll% below the
initial interest rate].
NOTE: This disclosure combines the requirements
of
§ 707.4(b)(1)(i)
with
§ 707.4(b)(1)(ii) for interest-bearing accounts.
The variable nature of a deposit account usually is based on an external index or is set at
the discretion of the board. If another means
of rate setting is used, that, instead of the
proposed language, must be disclosed. Since
account opening disclosures may be provided
to potential members requesting account information before opening an account, and
members opening new accounts, information
is provided indicating that the rate may not
be current, but that the potential member or
member may call the credit union to obtain
up-to-date information. When opening a new
account, of course, a credit union could provide the contractual rate alone, and delete
the sentences in brackets. Rarely would
there be limitations on rate changes, but
language is provided for this situation in the

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National Credit Union Administration

Pt. 707, App. B

last sentence. Of course, it is only to be used
if it applies to an account.
2. Dividend-bearing Term Share Accounts
The dividend rate on your term share account is lll%, with an annual percentage
yield (APY) of lll%. [For purposes of this
disclosure, this is a rate and APY that were
offered within the most recent seven calendar days and were accurate as of (date).
Please call (credit union telephone number)
to obtain current rate information.] The dividend rate and annual percentage yield may
change every (time period) based on [(name
of index)/the determination of the credit
union board of directors]. The dividend rate
for your account will [never change by more
than lll% each (time period)/never be less/
more than lll% /never exceed lll%
above or fall more than lll% below the
initial dividend rate].
NOTE: This disclosure combines the requirements
of
§ 707.4(b)(1)(i)
with
§ 707.4(b)(1)(ii) for dividend-bearing, variablerate term share accounts. The variable nature of a deposit account usually is based on
an external index or is set at the discretion
of the board. If another means of rate setting
is used, that, instead of the model language,
must be disclosed. Since account opening
disclosures may be provided to potential
members requesting account information before opening an account, and members opening new accounts, information is provided indicating that the rate may not be current,
but that the potential member or member
may call the credit union to obtain up-todate information. When opening a new account, of course, a credit union could provide
the contractual rate alone, and delete the
sentences in brackets. Rarely would there be
limitations on rate changes, but language is
provided for this situation in the last sentence. Of course, it is only to be used if it applies to an account.
3. Other Dividend-bearing Accounts

kpayne on VMOFRWIN702 with $$_JOB

[As of [the last dividend declaration date/
(date)], the dividend rate was lll% with
an annual percentage yield (APY) of lll%
on your account. /or The prospective dividend rate on your account is lll% with an
anticipated annual percentage yield (APY) of
lll% for the current dividend period.] The
dividend rate and annual percentage yield
may change every (dividend period) as determined by the credit union board of directors.
NOTE: This language combines the requirements of § 707.4(b)(1)(i) with § 707.4(b)(1)(ii).
Credit unions may disclose the dividend rate
and annual percentage yield on accounts as
of the last dividend declaration date. This
necessitates inclusion of a disclosure of the
actual calendar date of the last dividend declaration date or use of the phrase ‘‘last divi-

dend declaration date’’. Additionally or alternatively, credit unions may disclose a
prospective dividend rate and a prospective
annual percentage yield. Such prospective
rates and yields must be estimated in good
faith, and must be declared at the proper
time if it is at all possible to do so. As for
the last sentence in these disclosures, this
provision reflects the variable nature of the
account. Generally, there is only one variable-rate feature for share accounts: the frequency of dividend period rate changes (e.g.,
daily, weekly, monthly, quarterly, semi-annually, annually). Normally, there are no
contractual limitations on share account
earnings (unless imposed by a regulator), nor
are earnings based on any internal or external index. If contractual limitations or an
index are involved, however, those factors
would need to be disclosed (unless a regulator orders otherwise).
(iii) Stepped-Rate Accounts (§ 707.4(b)(1)(i))
1. Interest-bearing Accounts
The initial interest rate on your deposit
account is lll%. You will be paid that
rate [for (time period)/ until (date)]. After
that time, the interest rate for your deposit
account will be lll% and you will be paid
that rate [for (time period)/ until (date)]. The
annual percentage yield (APY) for your account is lll%. [For purposes of this disclosure, this is a rate and APY that were offered
within the most recent seven calendar days
and were accurate as of (date). Please call
(credit union telephone number) to obtain
current rate information.] You will be paid
this rate [for (time period)/until (date)/for at
least 30 calendar days].
2. Dividend-bearing Term Share Accounts
The initial dividend rate on your term
share account is lll%. You will be paid
that rate [for (time period)/ until (date)].
After that time, the dividend rate for your
term share account will be lll% and you
will be paid that rate [for (time period)/ until
(date)]. The annual percentage yield (APY)
for your account is lll%. [For purposes of
this disclosure, this is a rate and APY that
were offered within the most recent seven
calendar days and were accurate as of (date).
Please call (credit union telephone number)
to obtain current rate information.] You will
be paid this rate [for (time period)/until
(date)/for at least 30 calendar days].
3. Other Dividend-bearing Accounts
[As of [the last dividend declaration date/
(date)], the initial dividend rate on your account was lll%. /or The prospective dividend rate on your account is lll%.] You
will be paid that rate [for (time period)/ until
(date)]. After that time, the prospective dividend rate for your share account will be

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Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)

lll% and you will be paid such rate [for
(time period)/ until (date)]. The annual percentage yield (APY) for your account is
lll%. You will be paid this rate for [(time
period)/at least 30 calendar days].
NOTE: Stepped-rate accounts are accounts
with two or more rates that take effect in
succeeding periods. The applicable rates and
time periods are known when the account is
opened. By nature these are fixed-rate accounts and are usually associated with term
share (certificate) accounts. Accordingly, a
contract provision (for share accounts) to
change rates should be included.
(iv) Tiered-Rate Accounts (§ 707.4(b)(1)(i))
1. Interest-bearing Accounts
Tiering Method A
1* If your [daily balance/average daily balance] is $lll or more, the interest rate
paid on the entire balance in your account
will be lll%, with an annual percentage
yield (APY) of lll%.
2* If your [daily balance/average daily balance] is more than $lll, but less than
$lll, the interest rate paid on the entire
balance in your account will be lll%, with
an APY of lll%.
3* If your [daily balance/average daily balance] is $lll or less, the interest rate paid
on the entire balance will be lll% with an
APY of lll%.
[For purposes of this disclosure, this is a
rate and APY that were offered within the
most recent seven calendar days and were
accurate as of (date). Please call (credit
union telephone number) to obtain current
rate information.]
[Fixed-rate—You will be paid this rate [for
(time period)/until (date)/for at least 30 calendar days]./ Variable-rate—The interest rate
and APY may change every (time period)
based on [(name of index)/ the determination
of the credit union board of directors.]
NOTE: Tiering Method A pays the stated interest rate that corresponds to the applicable deposit tier on the full balance in the account. This example contemplates a two-tier
system. The option (1, 2 or 3) most closely
matching the terms of the account should be
chosen as the appropriate disclosure. For
tiered-rate accounts, a disclosure may be
added about the currency of the rate, as is
provided in the first set of brackets. A disclosure regarding the fixed-rate or variablerate nature of the account must be added, as
is provided in the last set of brackets.

kpayne on VMOFRWIN702 with $$_JOB

Tiering Method B
1* An interest rate of llll% will be paid
only on the portion of your [daily balance/
average daily balance] that is greater than
$llll. The annual percentage yield (APY)
for this tier will range from llll% to

llll%, depending on the balance in the
account.
2* An interest rate of llll% will be paid
only on the portion of your [daily balance/
average daily balance] that is greater than
$llll, but less than $llll. The annual
percentage yield (APY) for this tier will
range from llll% to llll%, depending
on the balance in the account.
3* If your [daily balance/average daily balance] is $llll or less, the interest rate
paid on the entire balance will be llll%,
with an annual percentage yield (APY) of
llll%.
[For purposes of this disclosure, this is a
rate and APY that were offered within the
most recent seven calendar days and were
accurate as of (date). Please call (credit
union telephone number) to obtain current
rate information.]
[Fixed-rate—You will be paid this rate [for
(time period)/until (date)/for at least 30 calendar days]./ Variable-rate—The interest rate
and APY may change every (time period)
based on [(name of index)/ the determination
of the credit union board of directors.]
NOTE: Tiering Method B pays different
stated interest rates corresponding to applicable deposit tiers, on the applicable balance
in each tier of the account. For example, a
credit union might pay 3% interest on account funds of $500 or below, and pay 4% interest on the portion of the same account
that exceeds $500. The example contemplates
an account with two tiers, but additional
tiers are possible. The option (1, 2 or 3) most
closely matching the terms of the account
should be chosen as the appropriate disclosure. For tiered-rate accounts, a disclosure
may be added about the currency of the rate,
as is provided in the first set of brackets.
Tiered-rate accounts can be either fixedrate or variable-rate accounts. The last sentence offers an option of either fixed-rate or
variable-rate disclosure. Thus, the disclosures outlined above will be made in addition
to either: (i) Disclosure of the period the
fixed-rates are in effect or (ii) the variablerate disclosures. Tiered-rate accounts are
also subject to the requirement for disclosure of the balance computation method, see
paragraph (e) to this appendix.
2. Dividend-bearing Term Share Accounts
Tiering Method A
1* If your [daily balance/average daily balance] is $llll or more, the dividend rate
paid on the entire balance in your account
will be llll%, with an annual percentage
yield (APY) of llll%.
2* If your [daily balance/average daily balance] is more than $llll, but less than
$llll, the dividend rate paid on the entire
balance in your account will be llll%,
with an APY of llll%.

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National Credit Union Administration

Pt. 707, App. B

3* If your [daily balance/average daily balance] is $llll or less, the dividend rate
paid on the entire balance will be llll%
with an APY of llll%.
[For purposes of this disclosure, this is a
rate and APY that were offered within the
most recent seven calendar days and were
accurate as of (date). Please call (credit
union telephone number) to obtain current
rate information.]
[Fixed-rate—You will be paid this rate [for
(time period)/until (date)/for at least 30 calendar days]./ Variable-rate—The interest rate
and APY may change every (time period)
based on [(name of index)/ the determination
of the credit union board of directors.]
NOTE: Tiering Method A pays the stated
dividend rate that corresponds to the applicable account balance tier on the full balance in the account. This example contemplates a two-tier system. The option (1, 2
or 3) most closely matching the terms of the
account should be chosen as the appropriate
disclosure. For tiered-rate accounts, a disclosure may be added about the currency of
the rate, as is provided in the first set of
brackets. A disclosure regarding the fixedrate or variable-rate nature of the account
must be added, as is provided in the last set
of brackets.
Tiering Method B

kpayne on VMOFRWIN702 with $$_JOB

1* A dividend rate of llll% will be paid
only on the portion of your [daily balance/
average daily balance] that is greater than
$llll. The annual percentage yield (APY)
for this tier will range from llll% to
llll%, depending on the balance in the
account.
2* A dividend rate of llll% will be paid
only on the portion of your [daily balance/
average daily balance] that is greater than
$llll, but less than $llll. The annual
percentage yield (APY) for this tier will
range from llll% to llll%, depending
on the balance in the account.
3* If your [daily balance/average daily balance] is $llll or less, the dividend rate
paid on the entire balance will be llll%,
with an annual percentage yield (APY) of
llll%.
[For purposes of this disclosure, this is a
rate and APY that were offered within the
most recent seven calendar days and were
accurate as of (date). Please call (credit
union telephone number) to obtain current
rate information.]
[Fixed-rate—You will be paid this rate [for
(time period)/until (date)/for at least 30 calendar days]./ Variable-rate—The interest rate
and APY may change every (time period)
based on [(name of index)/ the determination
of the credit union board of directors.]
NOTE: Tiering Method B pays different
stated dividend rates corresponding to applicable account balance tiers, on the applica-

ble balance in each tier of the account. For
example, a credit union might pay 3% dividend on account funds of $500 or below, and
pay 4% dividend on the portion of the same
account that exceeds $500. The example contemplates an account with two tiers, but additional tiers are possible. The option (1, 2 or
3) most closely matching the terms of the account should be chosen as the appropriate
disclosure. For tiered-rate accounts, a disclosure may be added about the currentness
of the rate, as is provided in the first set of
brackets.
Tiered-rate accounts can be either fixedrate or variable-rate accounts. The last sentence offers an option of either fixed-rate or
variable-rate disclosure. Thus, the disclosures outlined above will be made in addition
to either: (i) Disclosure of the period the
fixed-rates are in effect or (ii) the variablerate disclosures. Tiered-rate accounts are
also subject to the requirement for disclosure of the balance computation method, see
paragraph (e) to this appendix.
3. Other Dividend-bearing Accounts
Tiering Method A
1* [As of [the last dividend declaration
date/ (date)], if your [daily balance/average
daily balance] was $llll or more, the dividend rate paid on the entire balance in your
account was llll%, with an annual percentage yield (APY) of llll%. /or If your
[daily balance/average daily balance] is
$llll or more, a prospective dividend rate
of llll% will be paid on the entire balance in your account with a prospective annual percentage yield (APY) of llll% for
this dividend period.]
2* [As of [the last dividend declaration
date/ (date)], if your [daily balance/average
daily balance] was more than $llll, but
was less than $llll, the dividend rate
paid on the entire balance in your account
was llll%, with an annual percentage
yield (APY) of llll%. /or If your [daily
balance/average daily balance] is more than
$llll, but is less than $llll, a prospective dividend rate of llll% will be
paid on the entire balance in your account
with a prospective annual percentage yield
(APY) of llll% for this dividend period.]
3* [As of the last dividend declaration date/
(date)], if your [daily balance/average daily
balance] was $llll or less, the dividend
rate paid on the entire balance in your account will be llll% with an annual percentage yield (APY) of llll%. /or If your
[daily balance/average daily balance] is
$llll or less, the prospective dividend
rate of llll% will be paid on the entire
balance in your account with a prospective
annual percentage yield (APY) of llll%
for this dividend period.
[Fixed-rate—You will be paid this rate for
[(time period)/at least 30 calendar days]./

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Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)

Variable-rate—The dividend rate and APY
may change every (dividend period) as determined by the credit union board of directors.]
NOTE: Tiering Method A pays the stated
dividend rate that corresponds to the applicable deposit tier on the full balance in the
account. This example contemplates a twotier system. The option (1, 2 or 3) most closely matching the terms of the account should
be chosen as the appropriate disclosure. For
tiered-rate accounts, a disclosure may be
added about the prospective rate. Note that
the prospective rate disclosure options
match the required tiered-rate disclosures
based on the previous dividend declaration
date. A disclosure regarding the fixed-rate or
variable-rate nature of the account must be
added, as is provided in the last set of brackets.

kpayne on VMOFRWIN702 with $$_JOB

Tiering Method B
1* [As of [the last dividend declaration
date/ (date)], a dividend rate of llll% was
paid only on the portion of your [daily balance/average daily balance] that was greater
than $llll. The annual percentage yield
(APY) for this tier ranged from llll% to
llll%, depending on the balance in the
account. /or A prospective dividend rate of
llll% will be paid only on the portion of
your [daily balance/average daily balance]
that is greater than $llll with a prospective annual percentage yield (APY) ranging
from llll% to llll%, depending on
the balance in the account, for this dividend
period.]
2* [As of [the last dividend declaration
date/ (date)], a dividend rate of llll% was
paid only on the portion of your [daily balance/average daily balance] that was greater
than $llll but less than $llll. The annual percentage yield (APY) for this tier
ranged from llll% to llll%, depending on the balance in the account. /or A prospective dividend rate of llll% will be
paid only on the portion of your [daily balance/average daily balance] that is greater
than $llll, but less than $llll] with a
prospective annual percentage yield (APY)
ranging from llll% to llll%, depending on the balance in the account, for this
dividend period.]
3* [As of [the last dividend declaration
date/ (date)], if your [daily balance/average
daily balance] was $llll or less, the dividend rate paid on the entire balance was
llll%, with an annual percentage yield
(APY) of llll%. /or If your [daily balance/
average daily balance] was $lll or less,
the prospective dividend rate paid on the entire balance in your account will be lll%
with a prospective annual percentage yield
(APY) of lll% for this dividend period.
NOTE: Tiering Method B pays different
stated dividend rates corresponding to appli-

cable account tiers, on the applicable balance in each tier of the account. For example, a credit union might pay a 3% dividend
on account funds of $500 or below, and pay a
4% dividend on the portion of the same account that exceeds $500. The example contemplates an account with two tiers, but additional tiers are possible. The option (1, 2 or
3) most closely matching the terms of the account should be chosen as the appropriate
disclosure. Note that the prospective rate
disclosure options match the required tieredrate disclosures based on the previous dividend declaration date.
Tiered-rate accounts can be either fixedrate or variable-rate accounts. The last sentence offers an option of either fixed-rate or
variable-rate disclosures. Thus, the disclosures outlined above must be made in addition to either: (i) Disclosure of the period the
fixed-rates are in effect or (ii) the variablerate disclosures. Tiered-rate accounts are
also subject to the requirement for disclosure of the balance computation method, see
paragraph (e) to this appendix.
(b) Nature of Dividends (§ 707.4(b)(8))
Dividends are paid from current income
and available earnings, after required transfers to reserves at the end of a dividend period.
NOTE: The Board of Directors declares dividends based on current income and available
earnings of the credit union after providing
for the required reserves at the end of the
month. The dividend rate and annual percentage yield shown may reflect either the
last dividend declaration date on the account
or the earnings the credit union anticipates
having available for distribution. This disclosure only applies to share and share draft
(as opposed to deposit) accounts and should
be grouped with the Rate Information to
make the disclosures more meaningful. This
disclosure also does not apply to term share
accounts for reasons discussed in the supplementary information regarding §§ 707.3(e) and
707.4(b)(8).
(c) Compounding and Crediting (§ 707.4(b)(2))
[Dividends/Interest] will be compounded
(frequency) and will be credited (frequency).
and, if applicable:
If you close your [share/deposit] account
before [dividends/interest] [are/is] paid, you
will not receive the accrued [dividends/interest].
and, if applicable (for dividend-bearing accounts):
For this account type, the dividend period
is (frequency), for example, the beginning
date of the first dividend period of the calendar year is (date) and the ending date of
such dividend period is (date). All other dividend periods follow this same pattern of

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National Credit Union Administration

Pt. 707, App. B

dates. The dividend declaration date follows
the ending date of a dividend period, and for
the example is (date).
NOTE: Where the word ‘‘(frequency)’’ appears, time periods must be inserted to coincide with those specified in board resolutions
of each credit union’s board of directors. A
disclosure of dividend period was added to
§ 707.4(b)(2)(i) in the final rule to assist members in knowing when dividend rate and APY
disclosures would be given by a credit union
using the optional statement rule of
§ 707.6(a). The dividend declaration date is
important for purposes of § 707.4(a)(2)(ii), request disclosures, § 707.4(b)(2), account opening disclosures, and § 707.8(c)(2), advertising
disclosures. The Board believes that this is
critical information for dividend-bearing accounts, but that provision by an example
(whether of the first dividend period of the
year, or of any randomly chosen dividend period) is favorable to providing a list of such
dates for the entire year or for a period of
years (although these methods would also be
permissible). As noted in the supplementary
information to § 707.2(j), dividend declaration
date, the dividend period and actual dividend
distribution date may vary. Thus, it is possible for crediting periods and dividend periods not to coincide, though the Board believes that credit unions should make every
effort to attempt to coordinate the two periods.

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(d) Minimum Balance Requirements
(§ 707.4(b)(3)(i))
(i) To open the account
The minimum balance required to open
this account is $llll.
or, for first share account at a credit union
The minimum required to open this account is the purchase of a (par value of a
share) share in the credit union.
(ii) To avoid imposition of fees
You must maintain a minimum daily balance of $llll in your account to avoid a
service fee. If, during any (time period), your
account balance falls below the required
minimum daily balance, your account will
be subject to a service fee of $llll for
that (time period).
or
You must maintain a minimum average
daily balance of $llll in your account to
avoid a service fee. If, during any (time period), your average daily balance is below
the required minimum, your account will be
subject to a service fee of $llll for that
(time period).
(iii) To obtain the annual percentage yield
disclosed
You must maintain a minimum daily balance of $llll in your account each day to
obtain the disclosed annual percentage yield.
or

You must maintain a minimum average
daily balance of $llll in your account to
obtain the disclosed annual percentage yield.
(iv) Absence of minimum balance requirements
No minimum balance requirements apply
to this account.
(v) Par value
The par value of a share in this credit
union is $llll.
NOTE: Where the words ‘‘(time period)’’ appear, time periods should be inserted to coincide with those specified in board resolutions
of each credit union’s board of directors. As
the
supplementary
information
to
§ 707.4(b)(3)(i) explains, the par value of a
share to establish membership is a critical
disclosure to be made to potential members
of credit unions. The par value disclosure is
required by § 707.4(b)(3)(i) as being analogous
to a minimum balance account opening requirement.
(e) Balance Computation Method
(§ 707.4(b)(3)(ii))
(i) Daily Balance Method
[Dividends/Interest] [are/is] calculated by
the daily balance method which applies a
daily periodic rate to the balance in the account each day.
(ii) Average Daily Balance Method
[Dividends/Interest] [are/is] calculated by
the average daily balance method which applies a periodic rate to the average daily balance in the account for the period. The average daily balance is calculated by adding the
balance in the account for each day of the
period and dividing that figure by the number of days in the period.
NOTE: Any explanation of balance computation method must contain enough information for members to grasp the means by
which dividends or interest will be calculated on their accounts. Using a shorthand
form, such as ‘‘day in/day out’’ for the daily
balance method or ‘‘average balance’’ for the
average daily balance method, without more
information, is insufficient. In addition, any
disclosure based on the equivalency of the
two allowable methods, such as stating that
the average daily balance method was the
same as the daily balance method, is impermissible and misleading.
(f) Accrual of Dividends/Interest on Noncash
Deposits (§ 704.4(b)(3)(iii))
[Dividends/Interest] will begin to accrue on
the business day you [place/deposit] noncash
items (e.g. checks) to your account.
or
[Dividends/Interest] will begin to accrue no
later than the business day we receive provisional credit for the [placement/deposit] of
noncash items (e.g. checks) to your account.
NOTE: Accrual information is not included
in the explanation of balance computation

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Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)
(i) Disclosures Related to Term Share Accounts
(§ 707.4(b)(6))

method required by § 707.4(b)(4)(ii). In addition, the disclosures required by TISA do not
affect the substantive requirements of the
EFAA and Regulation CC.
The EFAA and Regulation CC control, and
any modifications to them should occasion
credit unions to revisit this disclosure with a
view to revising it to reflect current law.
(g) Fees and Charges (§ 707.4(b)(4))
The following fees and charges may be assessed against your account:
(Service/explanation)—$lll.
(Service/explanation)—$lll.
NOTE: Fees and charges may be disclosed in
an account disclosure, or separately in a
Rate and Fee Schedule (see section B–11 of
this appendix). In either event, the disclosure should also specify when the fee will be
assessed by using phrases such as ‘‘per
item,’’ ‘‘per month,’’ or ‘‘per inquiry.’’
(h) Transaction Limitations (§ 707.4(b)(5))
The minimum amount you may [withdraw/
write a draft for] is $llll
During any statement period, you may not
make more than six withdrawals or transfers
to another credit union account of yours or
to a third party by means of a preauthorized
or automatic transfer or telephonic order or
instruction. No more than three of the six
transfers may be made by check, draft, debit
card, if applicable, or similar order to a third
party. If you exceed the transfer limitations
set forth above in any statement period,
your account will be subject to [closure by
the credit union/a fee of $llll.
NOTE: This paragraph satisfies the requirements of § 707.4(b)(6) with respect to the Federal Reserve Board’s Regulation D limitations on share accounts and money market
accounts. These are some of the more common limitations applicable.

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The credit union reserves the right to require a member intending to make a withdrawal from any account (except a share
draft account) to give written notice of such
intent not less than seven days and up to 60
days before such withdrawal.
NOTE: This disclosure is limited to federal
credit unions with Bylaws containing this
limitation. See Standard Federal Credit Union
Bylaws, Art. III, section 5(a). Similar disclosures are required of any state-chartered
credit unions having similar limitations in
their bylaws, or under state law. This limitation does not directly relate to the ‘‘number’’ or ‘‘amount’’ of transactions, and accordingly, may not be necessary under
§ 707.4(b)(5), but would, if applicable, be required by § 707.3(b).

(i) Time requirements
Your account will mature on (date).
or
Your account will mature after (time period).
(ii) Early withdrawal penalties
We [will/may] impose a penalty if you
withdraw [any/all] of the [funds/principal] in
your account before the maturity date. The
penalty will equal [llll [days’/weeks’/
months’] [dividends/interest] on your account.
or
We [will/may] impose a penalty of
$lllll if you withdraw [any/all] of the
[funds/principal] before the maturity date.
If you withdraw some of your funds before
maturity, the [dividend/interest] rate for the
remaining funds in your account will be
lll%, with an annual percentage yield of
lll%.
NOTE: In most cases, the dividend rate and
annual percentage yield on the funds remaining in the account after early withdrawal are
the same as before the withdrawal. Accordingly, the disclosure of dividend rate and annual percentage yield after withdrawal is required only if the dividend rate and APY will
change.
(iii) Withdrawal of Dividends/Interest Prior to
Maturity
The annual percentage yield is based on an
assumption that [dividends/interest] will remain in the account until maturity. A withdrawal will reduce earnings.
NOTE: This disclosure may be used if the
credit union compounds dividends/interest
and allows withdrawal of accrued dividends/
interest before maturity. This disclosure
alerts members that the annual percentage
yield is based on an assumption that the
dividends/interest remain on deposit until
maturity.
(iv) Renewal Policies
1. Automatically Renewable Term Share
Accounts
Your term share account will automatically renew at maturity. You will have a
grace period of llll [calendar/business]
days after the maturity date to withdraw the
funds in the account without being charged
an early withdrawal penalty.
or
Your term share account will automatically renew at maturity. There is no grace
period following the maturity of this account.

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National Credit Union Administration

Pt. 707, App. B

2. Non-Automatically Renewable Term Share
Accounts
This account will not renew automatically
at maturity. If you do not renew the account, your account will [continue to earn/
no longer earn] [dividends/interest] after the
maturity date.
NOTE: These disclosures should agree with
the necessary pre-maturity notices for term
share accounts in B–3 of this appendix.
(v) Required dividend distribution.
This account requires the distribution of
dividends and does not allow dividends to remain in the account.
(j) Bonuses (§ 704.4(b)(7))
You will [be paid/receive] [$lllll/(description of item)] as a bonus [when you open
the account/on (date)].
You must maintain a minimum [daily balance/average daily balance] of $lllll to
obtain the bonus.
To earn the bonus, [$lllll/your entire
principal] must remain on deposit [for (time
period)/until (date)].
NOTE: These disclosures follow the requirements of § 707.4(b)(7) and should be used as
applicable. Further information may also be
added, especially if it clarifies the conditions
and timing of receiving the bonus, or better
informs the member about the bonus.
B–2 MODEL CLAUSES FOR CHANGES IN TERMS
(§ 707.5(a))

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On (date), the (type of fee) will increase to
$lllll.
On (date), the [dividend/interest] rate on
your account will decrease to lll%, with
an annual percentage yield (APY) of lll%.
On (date), the [minimum daily balance/average daily balance] required to avoid imposition of a fee will increase to $lllll.
NOTE: These examples apply to the more
common changes necessitating a change in
terms notice. However, any change, amendment or modification reducing the APY or
adversely affecting the members holding
such accounts must be disclosed. For such
changes not contemplated by the model
clauses, the Board recommends the use of as
simple language as possible to convey the
change, along with cross-referencing to the
particular sections or paragraph numbers of
the account opening disclosures, when to do
so
will assist members in reviewing and understanding the change.

B–3 MODEL CLAUSES FOR PRE-MATURITY NOTICES FOR TERM SHARE ACCOUNTS (§ 707.5(bc))
(a) Maturity Date
Your term share account will mature on
lllll.
(b) Nonrenewal
Unless your term share account is renewed, it will not accrue further [dividends/
interest] after the maturity date.
(c) Rate Information
The [dividend/interest] rate and annual
percentage yield that will apply to your
term share account if it is renewed have not
yet been determined. That information will
be available on llll. After that date, you
may call the credit union during regular
business hours at (telephone number) to find
out the [dividend/interest] rate and annual
percentage yield (APY) that will apply to
your term share account if it is renewed.
NOTE: Pre-maturity notices should follow
the requirements of § 707.5(b-d) as closely as
possible. Care should be taken to explain any
grace periods used. See discussion of use of
alternative timing in supplementary information to § 707.2(o) and § 707.5(b–d).
B–4 SAMPLE FORM (SIGNATURE CARD/
APPLICATION FOR MEMBERSHIP)
Application for Membership/Account Signature
Card
ACCOUNT NUMBER lllllll
lllll lllll lllll
(last name) (first name) (middle name)
llllllllllllllllllllllll
(street address) (apartment number)
lllll lll llll
(city) (state) (zip code)
llllll llllll
(home telephone number) (business telephone number)
ll–ll–llll
lllll
(Social Security # or TIN) (date of birth)
lllllll llllllll
(mother’s maiden name) (employer, occupation)
I hereby make application for membership
in and agree to conform to the Bylaws, as
amended, of lllll Credit Union (the
‘‘Credit Union’’). I certify that: I am within
the field of membership of this Credit Union;
the information provided on this application
is true and correct; and my signature on this
card applies to all accounts under my name
at this Credit Union. I also agree to be bound
to the terms and conditions of any account
that I have in the Credit Union now or in the
future.

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kpayne on VMOFRWIN702 with $$_JOB

Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)

llllllllllllllllllllllll
(signature of applicant)
This application approvedllll(date) by
the (Check one)
( ) Board
( ) Exec. Committee
( ) Membership Officer
Signed: lllllllllllllllllll
(Secretary; Exec. Cmte. Member, or
Membership Officer)

against the drafter, credit unions should be
very careful in their use of account terms
and conditions varying from those provided
as model clauses and sample forms in this
appendix.

NOTE: This form is modeled on NCUA Form
FCU 150, Application for Membership, as discussed in the Accounting Manual for FCUs,
§§ 5030.1, 5150.3. It is noted that other information can also be requested on the signature card, as long as it is in accordance with
federal and state laws. For example, information identifying the member, such as a
state driver’s license number, could be
added. The types of accounts that the signature applies to could be specified. Furthermore, the Board notes that this card contains much identification information that
may not be necessary for all credit unions;
common sense should guide credit union
boards of directors in designing their applications for membership/signature cards.
However, the Board believes that the information solicited on this form is reasonable
and prudent for many credit unions. Payable
on death designations, joint account language required under state law, life savings
beneficiary designations, and other like variations and designations may be added to the
card if so desired. The proposed signature
card/ application for membership form contained taxpayer certification language. One
commenter noted that the IRS may always
change its requirements in this area, which
are beyond the authority of the Board.
Therefore, the Board has deleted reference to
the IRS taxpayer certification required by 26
U.S.C. 3406, but notes that such certification
must be made in accordance with applicable
law and IRS rules. The information may be
included on the front and back of a standard
size signature card, or on the front of a large
size signature card. However, no account
terms may be included on a signature card
unless a copy of the signature card is provided to the member at the time of account
opening. The Board recommends that credit
unions refrain from this practice, and instead use standard account disclosures. One
reason for this is that if laws, regulations or
credit union policies change, discrepancies
may result between them and the earlier signature card terms. Given the longevity of
credit union membership, signature cards
may well be in use for up to or over a century. In addition, as signature cards are relatively small, they probably will not contain
enough space to make all desired and required disclosures. Fragmentation of terms,
some on signature cards, some on separate
disclosures, could easily lead to member confusion. As terms are usually construed

llllllllllllllllllllllll
Date Issued
llllllllllllllllllllllll
Account Number
llllllllllllllllllllllll
Certificate Number
llllllllllllllllllllllll
Social Security Number
This
is
to
certify
that
(name(s))
lllllllll [is/ are] the owner(s) of a
term share certificate account in the
lllll Credit Union (the ‘‘Credit Union’’)
in the amount of lllll Dollars
($lllll). This term share certificate account may be redeemed on (maturity date)
lllll only upon presentation of the certificate to the Credit Union. The dividend
rate of this certificate account is ll% with
an annual percentage yield of ll%. The annual percentage yield and dividend rate assume that dividends are to be [check one] (
) added to principal/( ) paid to regular share
account number lllll/ ( ) mailed to
owner(s). This account is subject to all terms
and conditions stated in the Term Share Certificate Account Disclosures, as they may be
amended from time to time, and incorporates the same by reference into this
agreement.
llllllllllllllllllllllll
Authorized signature
llllllllllllllllllllllll
Authorized signature

B–5 SAMPLE FORM (TERM SHARE
(CERTIFICATE) ACCOUNT)
Term Share Certificate

NOTE: This form is modeled on NCUA Form
FCU 107SCP, Credit Union Share Certificate,
as discussed in the Accounting Manual for
FCUs, §§ 5030.1, 5150.6. It is simplified to reflect the term share (certificate) account
agreement, the parties involved, the maturity term and the annual percentage yield
and dividend rate. All other terms are incorporated by reference. This should allow the
credit union maximum flexibility in fashioning certificate, and other term share account, products. If a credit union so desired,
other terms and conditions could be incorporated into the term share certificate itself,
as long as a copy is presented to the member
at the account opening. Care should also be
taken to ensure that the term share certificate format addresses any necessary state
law concerns. As the FRB’s Regulation D on
reserve requirements permits all term share
accounts to be represented by a transferable

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National Credit Union Administration

Pt. 707, App. B

or nontransferable, or a negotiable or nonnegotiable, certificate, instrument, passbook, statement or otherwise, and still be
considered a ‘‘time deposit’’, the Board has
made no entry on this sample form regarding
such terms, leaving the decision instead to
each credit union’s board of directors. 12
CFR 204.2(c)(2).
B–6 SAMPLE FORM (REGULAR SHARE ACCOUNT
DISCLOSURES)

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Regular Share Account Disclosures
1. Rate information. As of April 1, 1995, the
dividend rate was 5.00% and the annual percentage yield (APY) was 5.13% on your regular share account. In addition, the credit
union estimates a prospective dividend rate
of 5.25% and a prospective APY of 5.39% on
your share account for this dividend period.
The dividend rate and annual percentage
yield may change every quarter as determined by the credit union board of directors.
2. Compounding and crediting. Dividends
will be compounded daily and will be credited quarterly. For this account type, the
dividend period is quarterly, for example, the
beginning date of the first dividend period of
the calendar year is January 1 and the ending date of such dividend period is March 31.
All other dividend periods follow this same
pattern of dates. The dividend declaration
date follows the ending date of a dividend period, and for the example is April 1. If you
close your regular share account before dividends are credited, you will not receive accrued dividends.
3. Minimum balance requirements. The minimum balance to open this account is the
purchase of a $5 share in the Credit Union.
You must maintain a minimum daily balance of $500 in your account to avoid a service fee. If, during any day during a quarter,
your account balance falls below the required minimum daily balance, your account
will be subject to a service fee of $5 for that
quarter.
4. Balance computation method. Dividends
are calculated by the daily balance method
which applies a daily periodic rate to the
principal in your account each day.
5. Accrual of dividends. Dividends will begin
to accrue on the business day you deposit
noncash items (e.g., checks) to your account.
6. Fees and charges. The following fees and
charges may be assessed against your account.
a. Statement copies—$5.00 per statement.
b. Account inquiries—$3.00 per inquiry.
c. Dormant account fee—$10.00 per month.
d. Wire transfers—$8.00 per transfer.
e. Minimum balance service fee—$5.00 per
quarter.
f. Share transfer—$1.00 per transfer.
g. Excessive share withdrawals $1.00 per
item.

7. Transaction limitations. During any statement period, you may not make more than
six withdrawals or transfers to another credit union account of yours or to a third party
by means of a preauthorized or automatic
transfer or telephonic order or instruction.
No more than three of the six transfers may
be made by check, draft, debit card, if applicable, or similar order to a third party. If
you exceed the transfer limitations set forth
above in any statement period, your account
will be subject to closure by the credit union
or to a fee of $1.00 per item.
8. Nature of dividends. Dividends are paid
from current income and available earnings,
after required transfers to reserves at the
end of a dividend period.
9. Bylaw Requirements. A member who fails
to complete payment of one share within
lllll of his admission to membership, or
within lllll from the increase in the par
value in shares, or a member who reduces his
share balance below the par value of one
share and does not increase the balance to at
least the par value of one share within
lllll of the reduction may be terminated from membership at the end of a dividend period. [All blanks should be filled with
time chosen by credit union board of directors.] Shares may be transferred only from
one member to another, by written instrument in such form as the Credit Union may
prescribe. The Credit Union reserves the
right, at any time, to require members to
give, in writing, not more than 60 days notice of intention to withdraw the whole or
any part of the amounts so paid in by them.
No member may withdraw shareholdings
that are pledged as required on security on
loans without the written approval of the
credit committee or a loan officer, except to
the extent that such shares exceed the member’s total primary and contingent liability
to the Credit Union. No member may withdraw any shareholdings below the amount of
his/her primary or contingent liability to the
Credit Union if he/she is delinquent as a borrower, or if borrowers for whom he/she is
comaker, endorser, or guarantor are delinquent, without the written approval of the
credit committee or loan officer.
10. Par value of shares; Dividend period. The
par value of a regular share in this Credit
Union is $5. The dividend period of the Credit
Union is quarterly.
11. National Credit Union Share Insurance
Fund. Member accounts in this Credit Union
are federally insured by the National Credit
Union Share Insurance Fund.
12. Other Terms and Conditions. [In this
item, which may be titled or subdivided in
any manner by each credit union, NCUA suggests that the following issues be covered or
handled: Statutory lien or setoff; expenses
(garnishments and bankruptcy orders and
holds on account); joint ownership accounts;
trust accounts; payable-on-death accounts;

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12 CFR Ch. VII (1–1–20 Edition)

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retirement accounts; Uniform Transfer to
Minor Act accounts; sole proprietorship accounts; escrow and custodial accounts; corporation accounts; not-for-profit corporation
accounts; voluntary association accounts;
partnership accounts; public unit accounts;
powers of attorney (guardianship orders); tax
disclosures and certifications; Uniform Commercial Code variances; amendments; reliance on signature card; change of address;
incorporations of other documents by reference, such as expedited funds availability
policies, service charges schedules or electronic banking disclosures; ability to suspend services; and operational matters (stop
payment orders—verbal and written, satisfactory identification, refusal of deposits not
in proper form, wire transfers, stale check
deposits, availability of periodic statements
or passbook feature.)]
NOTE: This form is modeled on the share
account disclosures in the Accounting Manual
for FCUs, § 5150.7. The disclosures are for a
variable-rate, daily balance method dividend
calculation regular share account in an FCU
with a $500 minimum balance to avoid service fees. For the example, the account was
opened on May 1, 1995. Other terms are selfexplanatory. The dividend rate paid and annual percentage yield disclosures will reflect
the prospective dividend rate for a given dividend period. Item nos. 1–8 reflect standard
TISA and part 707 disclosures discussed in
sections B–1 through B–3 of this appendix.
Note that if the credit union limits the maximum amount of shares which may be held
by one member under NCUA Standard FCU
Bylaws, Art. III, section 2, that this should
be stated in item no. 7, transaction limitations. Item no. 9 reflects various terms provided in Art. III, sections 3–6 of the NCUA
Standard FCU Bylaws. Item no. 10 reflects the
par value amount of regular shares in a federal credit union, pursuant to section 117 of
the FCU Act, 12 U.S.C. 117. It also states the
dividend period of the credit union, which is
set by the board of directors. Item no. 11 addresses the requirements of 12 CFR part 740.
Nonfederally insured credit unions (NICUs)
would be expected to disclose information required by section 151 of the Federal Deposit
Insurance Corporation Improvement Act of
1991. 12 U.S.C. 1831t. By December 19, 1992, all
NICUs were required to include conspicuously on all periodic statements of account,
signature cards, passbooks, share certificates
and other similar instruments of deposit and
in all advertising a notice that the credit
union is not federally insured. Additional
disclosures will be required of NICUs by June
19, 1994. Item no. 12 is inserted to ensure that
credit unions add other account terms and
conditions not covered by the proposed regulation. These sorts of terms are contemplated by proposed § 707.3(b), requiring
that the disclosures reflect the terms of the

legal obligation between the member and the
credit union. This list is not meant to be exhaustive, but to give a general idea of other
topics often covered in share account contracts. Item no. 12 is not expressly required
by either TISA or part 707, but any of these
terms that are disclosed must be accurate
and not misleading. Also the Board strongly
recommends that such terms are included in
account opening disclosures to inform the
membership and to clearly set forth the legal
relationship between the members and their
credit union.
B–7 SAMPLE FORM (SHARE DRAFT ACCOUNT
DISCLOSURES)
Share Draft Account Disclosures
1. Rate information. As of January 1, 1995,
the dividend rate was 3.00% and the annual
percentage yield (APY) was 3.04% on your
share account. In addition, the prospective
dividend rate on your account is 3.15% with
a prospective annual percentage yield (APY)
of 3.20% for the current dividend period. The
dividend rate and APY may change every
dividend period as determined by the credit
union board of directors.
2. Compounding and crediting. Dividends
will be compounded monthly and will be
credited monthly. For this account type, the
dividend period is monthly, for example, the
beginning date of the first dividend period of
the calendar year is January 1 and the ending date of such dividend period is January
31. All other dividend periods follow this
same pattern of dates. The dividend declaration date follows the ending date of a dividend period, and for the example above is
February 1. If you close your share draft account before dividends are credited, you will
not receive accrued dividends.
3. No Minimum balance requirements apply to
this account.
4. Balance computation method. Dividends
are calculated by the average daily balance
method which applies a periodic rate to the
average daily balance in the account for the
period. The average daily balance is calculated by adding the balance in the account
for each day of the period and dividing that
figure by the number of days in the period.
5. Accrual of dividends. Dividends will begin
to accrue no later than the business day we
receive provisional credit for the placement
of noncash items (e.g. checks) to your account.
6. Fees and charges. The following fees and
charges may be assessed against your account.
a. Statement copies—$5.00 per statement.
b. Account inquiries—$3.00 per inquiry.
c. Dormant account fee—$10.00 per month.
d. Wire transfers—$8.00 per transfer.
e. Overdrafts/Returned Items—$5.00 per
draft.
f. Share transfer—$1.00 per transfer.

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National Credit Union Administration

Pt. 707, App. B

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g. Excessive share withdrawals—$1.00 per
item.
h. Certified checks—$5.00 per check.
i. Stop Payment Order—$5.00 per order.
j. Check Printing Fee—$12.00 per 200 checks
(varies depending on style of check ordered).
7. No transaction limitations apply to this account.
8. Nature of dividends. Dividends are paid
from current income and available earnings,
after required transfers to reserves at the
end of a dividend period.
9. Bylaw Requirements. A member who fails
to complete payment of one share within
lllll of his admission to membership, or
within lllll from the increase in the par
value in shares, or a member who reduces his
share balance below the par value of one
share and does not increase the balance to at
least the par value of one share within
lllll of the reduction may be terminated from membership at the end of a dividend period. [All blanks should be filled with
time chosen by credit union board of directors.] Shares may be transferred only from
one member to another, by written instrument in such form as the Credit Union may
prescribe. The Credit Union reserves the
right, at any time, to require members to
give, in writing, not more than 60 days notice of intention to withdraw the whole or
any part of the amounts so paid in by them.
Shares paid in under an accumulated payroll
deduction plan may not be withdrawn until
credited to a member’s account. No member
may withdraw shareholdings that are
pledged as required on security on loans
without the written approval of the credit
committee or a loan officer, except to the extent that such shares exceed the member’s
total primary and contingent liability to the
Credit Union. No member may withdraw any
shareholdings below the amount of his/her
primary or contingent liability to the Credit
Union if he/she is delinquent as a borrower,
or if borrowers for whom he/she is comaker,
endorser, or guarantor are delinquent, without the written approval of the credit committee or loan officer.
10. Par value of shares; Dividend period. The
par value of a regular share in this Credit
Union is $5. The dividend period of the Credit
Union is monthly, beginning on the first of a
month and ending on the last day of the
month.
11. National Credit Union Share Insurance
Fund. Member accounts in this Credit Union
are federally insured by the National Credit
Union Share Insurance Fund.
12. Other Terms and Conditions. [See section
B–6, item 12, of this appendix].
NOTE: This form is modeled on the share
account disclosures in the Accounting Manual
for FCUs, § 5150.7. The disclosures are for a
variable-rate, average daily balance method
dividend calculation share draft account in

an FCU with no minimum balance requirement. For purposes of this example, the account was opened on January 15, 1995. The
Credit Union has monthly dividend periods.
Other terms are self-explanatory. The dividend rate paid and annual percentage yield
disclosures will reflect the prospective dividend rate for a given dividend period. The
disclosures are very similar to the ones in
section B–6 of appendix B, except for the rollback and par value disclosures, which have
been removed from the final rule and appendices.
B–8 SAMPLE FORM (MONEY MARKET SHARE
ACCOUNT DISCLOSURES)
Money Market Share Account Disclosures
1. Rate information. As of January 1, 1995, if
your average daily balance was $500 or more,
the dividend rate paid on the entire balance
in your account was 4.75%, with an annual
percentage yield (APY) of 4.85%. If your average daily balance is $500 or more, a prospective dividend rate of 4.95% will be paid
on the entire balance in your account with a
prospective APY of 5.00% for this dividend
period on your account. The dividend rate
and APY may change every dividend period
as determined by the credit union board of
directors.
2. Compounding and crediting. Dividends
will be compounded monthly and will be
credited quarterly. If you close your share
money market account before dividends are
credited, you will not receive accrued dividends.
3. Minimum balance requirements. The minimum balance required to open this account
is $500. You must maintain a minimum daily
balance of $500 in your account to avoid a
service fee. If, during any (time period), your
account falls below the required minimum
daily balance, your account will be subject
to a service fee of $5 for that (time period).
4. Balance computation method. Dividends
are calculated by the average daily balance
method which applies a periodic rate to the
average daily balance in your account for
the period. The average daily balance is calculated by adding the principal in the account for each day of the period and dividing
that figure by the number of days in the period.
5. Accrual of dividends. Dividends will begin
to accrue on the business day you deposit
noncash items (e.g., checks) to your account.
6. Fees and charges. The following fees and
charges may be assessed against your account.
a. Statement copies—$5.00 per statement.
b. Account inquiries—$3.00 per inquiry.
c. Dormant account fee—$10.00 per month.
d. Wire transfers—$8.00 per transfer.
e. Minimum balance service fee—$5.00 per
(time period).
f. Share transfer—$1.00 per transfer.

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Pt. 707, App. B

12 CFR Ch. VII (1–1–20 Edition)

g. Excessive share withdrawals—$1.00 per
item.
h. Certified checks—$5.00 per check.
i. Stop Payment Order—$5.00 per order.
j. Check Printing Fee—$12.00 per 200 checks
(varies depending on style of check ordered).
7. Transaction limitations. During any statement period, you may not make more than
six withdrawals or transfers to another credit union account of yours or to a third party
by means of a preauthorized or automatic
transfer or telephonic order or instruction.
No more than three of the six transfers may
be made by check, draft, debit card, if applicable, or similar order to a third party. If
you exceed the transfer limitations set forth
above in any statement period, your account
will be subject to closure by the credit union
or to a fee of $1.00 per item.
8. Nature of dividends. Dividends are paid
from current income and available earnings,
after required transfers to reserves at the
end of a dividend period.
9. Bylaw Requirements. [This section should
reflect any requirements concerning share
accounts in the FISCU’s bylaws or charter.]
10. Par value of shares; Dividend period. The
par value of a regular share in this Credit
Union is $50. The dividend period of the Credit Union is monthly, beginning on the first of
a month and ending on the last day of the
month.
11. National Credit Union Share Insurance
Fund. Member accounts in this Credit Union
are federally insured by the National Credit
Union Share Insurance Fund.
12. Other Terms and Conditions. [See section
B–6, item 12, of this appendix.]
NOTE: This form is modeled on the share
account disclosures in the Accounting Manual for FCUs, § 5150.7 and on the share draft
account disclosures in section B–7 of this appendix. The disclosures are for a variablerate, tiered-rate (method A, option 1), average daily balance method dividend calculation, money market share account in a
FISCU with a $500 minimum balance to open
the account and to avoid service fees. For
purposes of this example, the account was
opened on January 29, 1995. Other terms are
self-explanatory. The dividend rate paid and
annual percentage yield disclosures will reflect the prospective dividend rate for a
given dividend period. Note that the contents of Item 9, Bylaw requirements, must be
tailored to the specific bylaws of a FISCU or
NICU. Also note the high par value amount
in Item 10.

kpayne on VMOFRWIN702 with $$_JOB

B–9 SAMPLE FORM (TERM SHARE
(CERTIFICATE) ACCOUNT DISCLOSURES)
Term Share (Certificate) Account Disclosures
1. Rate information. [Repeat rates disclosed
on face of term share certificate, see § B–5,

Sample Form (Term Share (Certificate) Account)].
2. Compounding and crediting. Dividends
will be compounded monthly and will be
credited annually. If you close your certificate account before dividends are credited,
you will not receive accrued dividends.
3. Minimum balance requirements. The
minium balance required to open this account is $500.
4. Balance computation method. Dividends
are calculated by the daily balance method,
which applies a daily periodic rate to the
principal in your account each day.
5. Accrual of dividends. Dividends will begin
to accrue on the business day you deposit
noncash items (e.g., checks) to your account.
6. Fees and charges. The following fees and
charges may be assessed against your account.
a. Statement copies—$5.00 per statement.
b. Account inquiries—$3.00 per inquiry.
c. Share transfer—$1.00 per transfer.
7. Transaction limitations. After the account
is opened, you may not make deposits into
the account until the maturity date stated
on the certificate.
8. Maturity date. Your account will mature
on January 1, 1996.
9. Early withdrawal penalties. We may impose a penalty if you withdraw any of the
funds before the maturity date. The penalty
will equal three months’ dividends on your
deposit.
10. Renewal policies. Your certificate account will automatically renew at maturity.
You will have a grace period of 10 business
days after the maturity date to withdraw the
funds in the account without being charged
an early withdrawal penalty.
11. Bonus. You will receive a new (insert
brand name) toaster-oven as a bonus when
you open the account after December 31,
1994, and before June 30, 1995. You must
maintain your entire principal on deposit
until the maturity date of your certificate
account to obtain the bonus.
12. [Reserved]
13. Bylaw Requirements. [This section
should reflect any requirements concerning
share accounts in the FISCU’s bylaws or
charter.]
14. Par value of shares; Dividend period. The
par value of a regular share in this Credit
Union is $25. The dividend period of the Credit Union on this type of account is annual,
beginning on the date the account is opened,
and ending on the stated maturity date, unless renewed.
15. National Credit Union Share Insurance
Fund. Member accounts in this Credit Union
are federally insured by the National Credit
Union Share Insurance Fund.
16. Other Terms and Conditions. [See section
B–6, item 12, of this appendix.]

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National Credit Union Administration

Pt. 707, App. B

NOTE: Even though this disclosure if for an
account at a FISCU, this form is modeled on
the share account disclosures in the Accounting Manual for FCUs, § 5150.7 and upon the
regular share account disclosures in section
B–6 of this appendix. The disclosures are for
a fixed-rate, daily balance method dividend
calculation, automatically renewing term
share certificate account in a FISCU with a
$500 minimum balance to open the account
and a ten day grace period. For the example,
the account is opened on January 1, 1995 and
matures on January 1, 1996. Other terms are
self-explanatory. The dividend rate paid and
annual percentage yield disclosures reflect
the contracted, prospective dividend rate for
a given dividend period. Note the special disclosures for term share certificate accounts,
items nos. 8–10. Note also the bonus disclosure, item no. 11.
B–10 SAMPLE FORM (PERIODIC STATEMENT)
Periodic Statement
llllllllllllllllllllllll
Member Name
llllllllllllllllllllllll
Account Number
[Transaction account activity by date.]
[Average daily balance of $1,500 for the
month, daily compounding.]
Your account earned $6.72, with an annual
percentage yield earned of 5.40%, for the
statement period from May 1 through and including May 31. In addition, your account
earned $15 in extraordinary dividends for this
period. Any fees assessed against your account are shown in the body of the periodic
statement and are identified by the code at
the bottom margin of this statement.
Service Charge Codes
SC–1 Stop Payment Order Fee
SC–2 Statement Copy Fee
SC–3 Draft Return Fee
SC–4 Transfer from Shares
SC–5 Microfilm Copy
SC–6 Share Draft Printing Fee
SC–7 Dormant Account Fee
SC–8 Wire Transfer Fee
SC–9 Excessive Share Withdrawal Fee
SC–10 lllllllllll

B–11 SAMPLE FORM (RATE AND FEE SCHEDULE)
Rate and Fee Schedule
This Rate and Fee Schedule for all Accounts sets forth certain conditions, rates,
fees and charges applicable to your regular
share, share draft, and money market accounts at the lllll Federal Credit Union
as of lllll [insert date of delivery to
member]. This schedule is incorporated as
part of your account agreement with the
lllll Federal Credit Union.
Regular Share
Dividend Rate as of Last Dividend Declaration Date lll%.
Annual Percentage Yield as of Last Dividend Declaration Date lll%.
Prospective Dividend Rate lll%.
Prospective Annual Percentage Yield
lll%.
Dividends Compounded [Annually, Semiannually, Quarterly, Monthly, Weekly,
Daily].
Dividends Credited—At close of a dividend
period.
Dividend Period [Annually, Semiannually,
Quarterly, Monthly, Weekly, Daily].
Minimum Opening Deposit $5.00 par value
share.
Minimum Monthly Balance [None, $
amount].
Share Draft

Other Transactions
D Dividends
EC Error Correction
OR Overdraft Returned
OL Overdraft Loan
OS Overdraft Share Transfer

kpayne on VMOFRWIN702 with $$_JOB

formation regarding fees could also be included on the line of the periodic statement
showing when the fees were debited from the
account. Alternatively, a credit union could
show all fees debited against the account for
the statement period in a special area of the
periodic statement. Clarity to the member of
the required information—annual percentage
yield earned; amount of dividends; fees imposed and length of period—is the important
goal. An additional disclosure regarding the
dollar value of any extraordinary dividends
earned must be added to those statements
showing the payment of such extraordinary
dividends to the member.

NOTE: This form is modeled on the share
draft statement of account, Form FCU 107GSD, in the Accounting Manual for FCUs,
§ 5150.4. All information is self-explanatory.
Codes of transactions are not required, but
are a common credit union practice. The in-

Dividend Rate as of Last Dividend Declaration Date lll%.
Annual Percentage Yield as of Last Dividend Declaration Date lll%.
Prospective Dividend Rate lll%.
Prospective Annual Percentage Yield
lll%.
Dividends Compounded [Annually, Semiannually, Quarterly, Monthly, Weekly,
Daily].
Dividends Credited—At close of a dividend
period.
Dividend Period [Annually, Semiannually,
Quarterly, Monthly, Weekly, Daily].
Minimum Opening Deposit [None, $
amount].

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Pt. 707, App. C
Minimum
amount].

12 CFR Ch. VII (1–1–20 Edition)

Monthly

Balance

[None,

$

B–12 AGGREGATE OVERDRAFT AND RETURNED
ITEM FEES SAMPLE FORM

Money Market
Dividend Rate as of Last Dividend Declaration Date lll%.
Annual Percentage Yield as of Last Dividend Declaration Date lll%.
Prospective Dividend Rate lll%.
Prospective Annual Percentage Yield
lll%.
Dividends Compounded [Annually, Semiannually, Quarterly, Monthly, Weekly,
Daily].
Dividends Credited—At close of a dividend
period.
Dividend Period [Annually, Semiannually,
Quarterly, Monthly, Weekly, Daily].
Minimum Opening Deposit [None, $
amount].
Minimum Monthly Balance [None, $
amount].
The following fees may be assessed in connection with your accounts:
FEES APPLICABLE TO ALL ACCOUNTS
Returned item fee—$ll.00 per item.
Account reconciliation fee—$ll.00 per
hour.
Statement copies fee—$ll.00 per statement.
Certified draft fee—$ll.00 per draft.
Wire transfer fee—$ll.00 per transfer.
Account inquiry fee—$ll.00 per inquiry.
Dormant account fee—$ll.00 per month.
Minimum balance service fee—$ll.00 per
day.
Share transfer fee—$ll.00 per transfer.
Excessive share withdrawals fee—$ll.00
per item.
SHARE DRAFT ACCOUNT FEES
Monthly service fee—$ll.00 per month.
Overdraft transfers fee—$ll.00 per overdraft.
Drafts returned insufficient funds fee—
$ll.00 per draft.
Stop payment order fee—$ll.00 per order.
Draft copy fee—$ll.00 per copy.
Check printing fee—$ll.00 per 200 drafts.
MONEY MARKET SHARE ACCOUNT FEES

kpayne on VMOFRWIN702 with $$_JOB

Monthly service fee—$ll.00 per month.
Check printing fee—$ll.00 per 200 drafts.
NOTE: This illustration is for use of an
FCU. The information provided on a Rate
and Fee Schedule can be presented in any
format. To ensure that it is a part of the account agreement, if used, it should be incorporated by reference into the appropriate
share account disclosures. The figures used
are illustrative only.

Total for this
period
Total overdraft fees .......
Total returned item fees

$60.00
$0.00

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$150.00
$30.00

[58 FR 50445, Sept. 27, 1993, as amended at 59
FR 13436, 13437, Mar. 22, 1994; 63 FR 71575,
Dec. 29, 1998; 72 FR 30246, May 31, 2007; 74 FR
36104, July 22, 2009; 75 FR 47175, Aug. 5, 2010;
77 FR 71084, Nov. 29, 2012]

APPENDIX C TO PART 707—OFFICIAL
STAFF INTERPRETATIONS
Introduction
1. Official status. This commentary is the
means by which the staff of the Office of
General Counsel of the National Credit
Union Administration issues official staff interpretations of Part 707 of the NCUA Rules
and Regulations. Good faith compliance with
this commentary affords protection from liability under section 271(f) of the Truth in
Savings Act (TISA), 12 U.S.C. 4311.
Section 707.1—Authority, Purpose, Coverage,
and Effect on State Laws
(c) Coverage
1. Foreign applicability. Part 707 applies to
all credit unions that offer share and deposit
accounts to residents (including resident
aliens) of any state as defined in § 707.2(v)
and that offer accounts insurable by the National Credit Union Share Insurance Fund
(NCUSIF) whether or not such accounts are
insured by the NCUSIF. Corporate credit
unions designated as such by NCUA under 12
CFR 704.2 (definition of ‘‘corporate credit
union’’) are exempt from part 707.
2. Persons who advertise accounts. Persons
who advertise accounts are subject to the advertising rules. This includes agent and
agented accounts, such as a member who
subdivides interests in a jumbo term share
certificate account for sale to other parties
or among members who form a certificate
account investment club. For example, if an
agent places an advertisement that offers
members an interest in an account at a credit union, the advertising rules apply to the
advertisement, whether the account is held
by the agent or directly by the member.
3. Nonautomated credit unions. Nonautomated credit unions with an asset size of $2
million or less, after subtracting any nonmember deposits, are exempt from TISA and
part 707. NCUA defines a ‘‘nonautomated
credit union’’ as a credit union without sufficient data processing capability and capacity to establish, operate and maintain a
share and loan software system to timely

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