Question of the Week

Question:  We are looking to open accounts online and wonder if we are required to provide account opening disclosures immediately or if we can send them after the account opens for review later. What is the correct timing?

Answer: To cite 12 CFR 707.4:

“(i) General. A credit union must provide account disclosures to a member or potential member before an account is opened or a service is provided, whichever is earlier. A credit union is deemed to have provided a service when a fee required to be disclosed is assessed. Except as provided in paragraph (a)(1)(ii) of this section, if a member or potential member is not present at the credit union when the account is opened or the service is provided and has not already received the disclosures, the  credit union must mail or deliver the disclosures no later than 10 business days after the account is opened or the service is provided, whichever is earlier.

(ii) Timing of electronic disclosures. If a member or potential member who is not present at the credit union uses electronic means, for example, an internet Web site, to open an account or request a service, the disclosures required under paragraph (a)(1) of this section must be provided before the account is opened or the service is provided.”

So in most instances, the disclosures must be provided at account opening time, and not after. For online accounts, it must be provided prior to offering the service, and it is recommended that you use a method consistent with ESIGN/UETA to do that.