Before I open a CD at a new institution, I like to review its Truth in Savings Act (TISA) disclosures.
I verify things like how often interest or dividends are paid, whether I can withdraw them after posting and penalties for early principal withdrawals, including account closure after my death.
Studying written disclosures beats relying on a telephone rep’s verbal say-so.
So I was dismayed when, after requesting that NASA Federal Credit Union furnish me, by secure email, the TISA disclosures for its 2.25% APY 49-month CD, I received the following reply:
“Unfortunately, we can not (sic) provide that document until the certificate is opened and funded.”
A rep had told me this CD could only be opened outside a branch by phone, after funds had arrived. Under these circumstances, TISA rules give the institution 10 business days after opening to deliver or mail the disclosures.
But those rules also state that “(a) credit union must provide account disclosures to a member or potential member upon request.”
Requested disclosures must be mailed or delivered “within a reasonable time” (10 business days after request is deemed “reasonable”), and they may, but need not, be furnished “electronically if the member or potential member agrees.”
In other words, by requesting them online, I was entitled to see the TISA disclosures before opening and funding my CD!
After I threatened to complain to regulators, NASA apparently recognized its error and emailed me information it thought complied with my request.
This included its Web page entitled “Rates – Share Certificates” and a brochure entitled “Current Rates – July 2014.”
I scoured these documents, as well as a copy of NASA’s Member Services Agreement, which I found by clicking on a link on the “Rates – Share Certificates” Web page.
Although they provided many details about the 49-month CD, gaps remained.
For example, while indicating there was a penalty for early withdrawal of principal, they didn’t disclose what it was (apparently, 6 months’ dividends).
They also didn’t disclose that dividends could be withdrawn after monthly posting (I’d been told by phone they could) or, as required by TISA rules, that the advertised 2.25% APY assumed that all dividends remained on deposit until maturity.
The Member Services Agreement suggested there were “separate agreements and/or disclosures” relating to CDs (perhaps TISA-compliant). I’d asked for these already, but they weren’t provided.
Adding chaos to confusion, a Google search revealed another NASA FCU document entitled “Member Services Agreement for Personal Accounts,” which did contain disclosures about dividend withdrawals and early closure penalties.
However, as best I can tell, this document has been superseded by the Member Services Agreement version directly linked on the CD rates page, which covers both consumer and business accounts and which does not have this information.
Now I’ve gone from being mildly nonplussed to being totally flummoxed.
I don’t accuse NASA of nefarious motives here. Plus, the “reasonable time” TISA rules give NASA to furnish the requested disclosures hasn’t expired yet.
But a credit union member shouldn’t have to hurdle barriers to get full TISA disclosures in advance of account opening.
They should be easily accessible – in one place – online.
Oh, by the way, I’ve decided not to pursue opening a CD.