You may feel overwhelmed when deciding which bank to use when opening an account because there are so many different options out there. In order to help consumers avoid feeling overwhelmed when selecting which bank to do business with, the federal government enacted the Truth in Savings Act (TISA). TISA applies to all financial institutions and credit unions and is designed to help you make informed decisions.
What Types of Accounts Does the Truth in Savings Act Cover?
TISA covers all consumer accounts which most banks offer. These include traditional accounts, such as:
- Checking accounts
- Savings accounts
- Money Market accounts
- Certificates of Deposit (CDs)
What Types of Accounts Are Not Covered by the Truth in Savings Act?
The Truth in Savings Act does not apply to commercial accounts, or any account opened for a business purpose. Thus, TISA does not apply to accounts that belong to sole proprietorships, partnerships, and corporations, or have been created for other business purposes.
What Are the Requirements of the Truth in Savings Act?
TISA deals with how banks advertise, what they must tell you when you apply for an account, and what the bank does behind the scenes with your account. Examples include:
- Disclosure of your Annual Percentage Yield (APY) on savings accounts - The APY will let you know how much interest you can earn for every $100 you keep in your account for a year
- Provide you with a list of their fees upon request - The list must include various fees, including: bounced checks, stop payment orders, certified checks, and wire transfers
- Regulate what the term "free checking" means - For example, "free checking" cannot have hidden charges or minimum balance requirements
Do I Need a Lawyer?
If you feel your bank is violating TISA and you believe you have been financially harmed, an experienced attorney familiar with consumer banking can discuss your problem and advise you of your rights and remedies.