We are receiving a significant number of computer-generated, form letters from Cushion, a fintech in San Francisco, requesting refunds of fees (generally overdraft fees). In researching Cushion, I have found that a consumer pays an annual fee and provides the company with access to their bank accounts via online banking. Cushion then scans the customer's accounts looking for fees. If it finds any fees, it generates a letter requesting the fees be refunded, citing difficulties during the COVID pandemic. We are handling these requests according to our policy, but the volume of requests has significantly increased and we are receiving as many as 50 per day. I would like to know if other institutions have reported receiving these third-party refund requests from and how they are dealing with them. In addition, have you heard any thing about these types of services from the regulatory agencies' perspective.
As it pertains to Reg O and overdraft monitoring: Are business DDA accounts for which directors are signers to be included in the overdraft monitoring process?
As it relates to ODP programs, have there been any recent updates or proposals related to debit card authorizations approved on a positive balance, but which are then presented against insufficient funds because customer has used the funds and the bank is not allowed to assess OD/NSF fees on the debit card item? (This assumes the customer has opted-in for Reg E inclusion of debit card transactions.) I've heard this may be considered a UDAAP problem but haven't found any publications on the subject.
Vendor “v” Compliance and I’m in the middle. Scenario; Our customer goes to a casino, casino issues a card, customer uses it at the casino, casino uses POS entry class code and runs it through ACH network, customer does not have a debit card with us or has not OPT-IN. If the transaction is NSF can we assess a fee? I know we can return if necessary, our vendor has an identifier on the transaction so we know it came through ACH and can return it but have been told we cannot assess a fee unless the customer has OPTIN. My interpretation of 2017 NACHA rule book pages ORxxxvi, OR 18 and OR60 is that banks should be able to assess a fee because this is an ACH transaction not a Debit Card (POS, ATM) transaction. Which rules apply to this transaction?
Is UDAP (Unfair or Deceptive Acts or Practices) a concern with overdraft services?
May a financial institution disclose a single balance inclusive of overdraft protection funds (i.e. a line of credit or discretionary service amount)?
May a financial institution process transactions in a manner that allows the financial institution to maximize overdraft fee income?
Is a Notice Regarding Overdraft Fees disclosure required to be posted on an ATM? A question was recently asked about required ATM signage (https://www.bankersonline.com/qa/required-signage-atm) however I did not see mention of this Notice. Could this be a CA specific notice or one that may have been required in the past? The notice reads “If you do not have sufficient funds in your account for the withdrawal amount requested,completing the transaction may result in overdraft fees if you have given us prior permission to complete such transaction….”
Can an NSF fee be charged on a re-occurring POS transaction if the customer has opted in?
I understand that Reg E requires the bank to refund any overdraft fees associated with an unauthorized debit card transaction. Does this also include customer disputes via the merchant if they have also disputed with the bank?