As it relates to the 1-1-2010 effective provisions on Reg. DD regarding Opt-Out…

§230.11(b)(2)(xii)
(xii) an opt-out or opt-in notice regarding the institution’s payment of overdrafts or provision of discretionary overdraft services.

Is there a specific time period that banks are required to give the customer to opt-out?
(e.g., 30 days,???)

No. As yet, there is no regulatory requirement that banks provide opt-in or -out provisions relating to the payment of overdrafts; there is only a proposed amendment to Regulation E. That proposal, if adopted with an opt-out requirement, would provide a 30 day waiting period after providing an opt-out disclosure, during which time you could not impose an overdraft fee on ATM or certain POS debits. But discussions of the details of that proposal is an exercise in conjecture, since the Fed has not yet seen fit to provide a final rule.

There is also a "best practice" in the 2005 Overdraft Protection Guidance documents, but there is no time period provided there.

However, because of the wording you quoted, if you provide an opt-out or opt-in notice that notice would not be considered a trigger of further disclosures.

SO, reg. E has a pending proposal...
Is 230.11(b)(2)(xii)portion of Reg. DD going to be final in 2010?

I am confused... Reg E & DD are require opt-out but for different activities????

Help me understand, please...

Yes, the Reg DD change is final. It says "if you provide an opt-in or opt-out notice to customers, that notice is not an ad triggering the requirements of 230.11(b)(1)." It does not say you have to have an opt-in or opt-out.

I repeat what I said above -- there is no current regulatory requirement for an opt-in or opt-out on overdraft services.

I see... Thank you John.
Question:
In your opinion... Do you foresee that the opt-in/opt-out will eventually become a mandatory?

With the attention the question is getting from Congress, I think the Fed has only held back in order to see which way Congress is likely to go. If a bill is likely to make it out of Committee and actually have a chance of passing, the Fed will, I predict, wait until the bill passes and is enacted. Then, it will reissue the proposal with a short response deadline and issue a final rule.

Congress may fail to act, but bring pressure on the Fed to move instead. In that case, I think the Fed will think about incorporating any key features that Congress was pushing on, possibly reissue the proposal, and move to implement.

Either way, I think we will have some sort of opt-in or opt-out sometime in 2010.