The Truth in Savings Act (TISA) is a

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

federal law that was passed on December 19, 1991. It was part of the larger

Federal Deposit Insurance Corporation Improvement Act of 1991 The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA, ), passed during the savings and loan crisis in the United States, strengthened the power of the Federal Deposit Insurance Corporation. It allowed the FDIC to borrow direc ...

and is implemented by Regulation DD. It established uniformity in the disclosure of terms and conditions regarding

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...

and fees when giving out information on or opening a new savings account. On passing this law, the

US Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washin ...

noted that it would help promote economic stability, competition between depository institutions, and allow the consumer to make informed decisions. The Truth in Savings Act requires the clear and uniform disclosure of rates of interest ( annual percentage yield or APY) and the fees that are associated with the account so that the consumer is able to make a meaningful comparison between potential accounts. For example, a customer opening a

certificate of deposit A certificate of deposit (CD) is a time deposit, a financial product commonly sold by banks, thrift institutions, and credit unions in the United States. CDs differ from savings accounts in that the CD has a specific, fixed term (often one, ...

account must be provided with information about ladder rates (smaller interest rates with smaller deposits) and penalty fees for early withdrawal of a portion or all of the funds. The Act is only applicable to deposit accounts that are held by a "natural person" for personal, household, or family use. Accounts owned by businesses or organizations such as churches and

neighborhood associations A neighbourhood (British English, Irish English, Australian English and Canadian English) or neighborhood (American English; see spelling differences) is a geographically localised community within a larger city, town, suburb or rural area, ...

are not subject to these rules.

References

FDIC Law, Regulations, and Related Acts
- text of the Act {{George H. W. Bush 102nd United States Congress 1991 in law United States federal banking legislation Federal Deposit Insurance Corporation Savings and loan crisis 1991 in American politics 1991 in economics 1991 in the United States

See also

References