Regulation DD Changes -- A Sleeper Issue? John Burnett, BOL Guru Guru Bios
Question: Our overdraft processing is creating what I think may be a problem when we try to comply with the new interpretation of the statement disclosure requirements in section 230.6 of Reg DD. That interpretation requires that we use different "labels" for our fees for paying overdraft items and our fees for returning items.
Our processing system makes certain preliminary overdraft pay/return decisions during the overnight processing cycle, including the imposition of either an overdraft item fee or a return item fee, but almost every day we change some of those parameter-driven decisions. For example, we might decide to pay an item even though the system had suggested it be returned. Do we need to change the "return item fee" that the system had imposed to an "overdraft item fee" when we make a change of this sort?
Answer: Unfortunately, the answer is yes. You are paying the check, and the fee you impose should reflect that fact. Your processing system should provide you with a way to either manually reverse the Return Item Fee and impose an Overdraft Fee, or a way to change the description that accompanies the fee on the statement. The former method is probably preferable if you are totaling overdraft fees and return item fees on your monthly statements.
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