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#1034069 - 09/03/08 09:15 PM UDAP and Available Balance
joeschmoe Offline
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Joined: Dec 2005
Posts: 70
I read the following in Dave Dickinson's blog from July 3:

"Combined Balance" = my account + ODP/HELOC/OD LOC will get you a UDAP violation and FTC referral. No question.

I am not sure if Dave still posts here but I was looking for a little insight into this. My question stems from our Internet Banking site where the Available Balance includes ODP.

Is this something that will be going away? Will bank's no longer be able to provide an available balance that includes their true account balance plus ODP amount?

I was not able to find any guidance online so if someone has a link to anything I would appreciate it.

Thanks.

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#1034079 - 09/03/08 09:28 PM Re: UDAP and Available Balance joeschmoe
David Dickinson Offline
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I'm still here Joe.
The FDIC has held phone training and mentioned this is a a "no, no". They mentioned they must refer this to the FTC for CMPs. Also, you were reading my notes from the ABA's Compliance Conference. There was a panel of regulators that all mentioned this is a slam dunk. It's also mentioned in the ODP Best Practices (the only official guidance).

This won't be going away anytime soon. In fact, I expect this to become an official requirement (not to do this). The regulator's don't seem to be budging on this one at all.
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#1091768 - 12/04/08 04:43 PM Re: UDAP and Available Balance David Dickinson
CSB98 Offline
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Wisconsin
I wanted to resurrect this thread, because I had a question about this. It came up recently in our of our exams. When the examiners are talking about not including overdraft protection in the balance, don't you think they are really referring to products such as Bounce, where the customer is going to incur a fee? Our HELOCs and personal LOCs are set up as overdraft products (that's how our core processor sets them up). I can't imagine how many problems would occur of someone was at a store and couldn't make their purchase because their available line didn't include their HELOC or personal LOC balance.

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#1091809 - 12/04/08 05:16 PM Re: UDAP and Available Balance CSB98
John Burnett Offline
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I agree that all of the brouhaha is about overdraft services that do not involve Reg. Z-regulated lines of credit or automatic transfers from other customer accounts.
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#1092132 - 12/04/08 09:49 PM Re: UDAP and Available Balance John Burnett
David Dickinson Offline
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We're seeing criticism for any way of accessing (ATM, Internet, auto-phone and even talking to tellers) for any extra funds (HELOC, LOCs and bounce protection). I agree that more banks have problems with the bounce protection - ATM issue.
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#1092160 - 12/04/08 10:10 PM Re: UDAP and Available Balance David Dickinson
BrendaC Offline
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Sweet Home AL
OK, I am now officially confused. I thought that as long as disclosures were in place if triggered, it was an acceptable practice to include a ODP or even a HELOC LOC balance in the ATM balance.

FRB Final Rule: "To facilitate compliance, the staff commentary provides specific examples of when an institution is promoting the payment of overdrafts in an advertisement. For example, stating the overdraft limit for an account on a periodic statement or stating an account balance that includes available overdraft funds on an ATM receipt would be considered an advertisement triggering the required disclosures."
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#1092168 - 12/04/08 10:17 PM Re: UDAP and Available Balance BrendaC
David Dickinson Offline
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David Dickinson
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I'm referring to the banks that don't provide the disclosures. IOW, I look at my balance on the internet, ATM or call the bank and inquire about the balance in my checking account. I'm given a combined balance (available checking balance + LOC, HELOC or Bounce amount). No disclosure is stated making it clear I'm accessing loan funds or a bounce addition which both include fees.
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#1092183 - 12/04/08 10:30 PM Re: UDAP and Available Balance David Dickinson
BrendaC Offline
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Sweet Home AL
Thanks, David. One more senior moment averted!
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