The department received a number of inquiries regarding the proper procedure for savings banks and savings and loan associations to follow in transferring accounts from regular savings status to date of deposit—date of withdrawal (DOD/DOW) status. The department stated its position as follows:

The proper procedure and the procedure which the department recommends to all institutions requires the depositor to take some affirmative action to precipitate an account change. A bank may take the initiative by contacting its depositors either by means of a newspaper advertisement or by letter, and advising them that it is prepared to make the account transfer if it receives a written request to do so.

The department does not regard it as proper for a bank to make an account transfer without notifying the depositor or after notifying a depositor that the transfer will be made unless the bank is directed not to do so. This approach is regarded as unsound because of possible breach of the deposit contract and because of the risk of the bank finding itself with no regular savings accounts (which accounts it is required to maintain under section 245[3-b] if it is to have DOD/DOW accounts).

DATED: March 18, 1970