We have had the month to date NSF fees and YTD Fees on our statements for some time now. We just converted and our processor says that they are going to drop statements without this information on the statement for the rest of the month due to this requirement not being required until 01/01/10. Is this correct? I thought the effective date for this informaiton was a long time ago. Help!!!!

Would it be safe to say it has to be on there, and as of January 1, 2010 it has to be like the model disclosure?

I believe if you promote overdraft services, the fees have to show on the statement. Beginning 1/1/2010, all banks must list overdraft fees.

The requirement is that the information must be formatted substantially like that in sample for B-10, and placed on the statement in close proximity to other fees you disclose under 230.6(a)(3).

We added the Total Overdraft Fees as well as Total Returned Item Fees on the statements for the statement period and year-to-date totals. Does anyone have any information about how fee adjustments or reversals are to be handled? For example, if a customer is charged (3) $20 returned item fees during the month of June, but we also reversed a $20 fee in June that was previously posted in May, how are the total fees for the period and year-to-date totals to be reflected? Do we show $60 for the period or $40 (taking into account the reversal)? We were told IT MATTERS and if it isn't reflected right we won't be in compliance; however, I can't find any information on this.

Frassy
Can't locate right now where I read an article on this (and it gave examples)but you are correct it does matter. I believe that for the example given - if in June you reverese a May fee you did not reduce the June fees but adjusted the YTD. When I locate the source I will post.

Read the commentary to 230.11(a)(1) - Comment 4. It addresses the waiver of fees and disclosure.

When we rebate NSF fees, we do not have separate transaction codes for rebates of fees for checks paid vs. rebates of fees for checks returned, nor does there seem to be a reasonable way to capture this. We are planning on disclosing the fees themselves on separate lines, with current period and YTD totals, then add a 3rd line for rebated fees, current and YTD. Does this seem compliant with the requirements?

Comment 11(a)(1)–6, which has been
redesignated as comment 11(a)(1)–4 in
the final rule, addresses this issue where
an institution provides a statement for
the current period reflecting that fees
imposed during a previous period were
waived and credited to the account.
This comment provides that, in these
circumstances, institutions may, but are
not required to, reflect the adjustment in
the total for the calendar year-to-date
and in the applicable statement period.
For example, if an institution assesses a
fee in January and refunds the fee in
February, the institution could disclose
a year-to-date total reflecting the amount
credited, but it should not affect the
total disclosed for the February
statement period, because the fee was
not assessed in the February statement
period. However, because some
institutions may assess and then waive
and credit a fee within the same
statement cycle, the comment has been
revised to clarify that, in such a case,
the institution may reflect the
adjustment in the total disclosed for fees
imposed during the current statement
period and for the total for the calendar
year-to-date. In this case, if the
institution assesses and waives the fee
in February, the February fee total could
reflect a total net of the waived fee.

We were thinking that we would not net the rebates out of the fees themselves, but rather show them on a separate line, something like this:

Total for Total
this period year-to-date

Total Overdraft Fees $35.00 $175.00

Total Returned Item Fees $70.00 $140.00

Total Rebated OD/Returned Item Fees $50.00 $100.00

Does anyone think that this would be non-compliant? Our interpretation is that a) we may reflect rebated/waived fees, but do not have to, b) we should not reduce the current period fees by rebates of prior period fees c) we could net the rebates out of the year to date fees but do not have to (and we do not have the ability to differentiate between rebates of OD vs returned). From a customer experience perspective, we do want to show any rebated fees, so we are planning to disclose gross fees for each category, then rebated amounts as a separate line item.

Thank you in advance for your opinions.

When the regulation gives you the option of doing it one way or not doing it at all (reflecting the rebates in totals) disclosing those rebates in a different way might very well be considered a technical violation.

My recommendation, unless you can find a way to do it the way the Fed says it's permissible, don't make the added disclosure.

If I am reading the commentary correctly, it says you MAY but are not required to reflect reversals done after the fact whether in a statement cycle or not. We would have no way to report NSF/Return item fees that were reveresed after the fee was assessed. It would require a lot of enhancement to our core system to be able to accommodate this, and I believe that is why the commentary reads MAY?? Am I reading this correctly?

Does anyone have an example of how you are disclosing on the statement the aggregate of the Overdraft Item Fee and the Overdraft Account(Per day)Fee? Can these be combined into one line or should they be separated out?

We don't charge a per day fee, so can't help you there.

Georgia,

You're right, as John says, the language is permissive; you do not have to adjust your year to date total to reflect refunded fees. If you choose to do it as a volunteer, however, you must do it their way. You may not net it against the aggregate fees for the month in which the refund is made.

I am at a total loss as to why anyone would bother to make the adjustment...

Banker,

From the current commentary:

The total dollar amount includes per-item fees as well as interest charges, daily or other periodic fees, or fees charged for maintaining an account in overdraft status...

It is included in the aggregate amount of fees for whatever you call the NSF items that you paid.

I wanted to address Ken's comment, "I am at a total loss as to why anyone would bother to make the adjustment..." Here is my feeling - By providing the total fees charged per period and particulary YTD, the consumer is made accutely aware of just how much they have paid. If we have rebated some of that total, wouldn't that be important for them to know? Stated another way, wouldn't we want them to be just as accutely aware that they didn't actually pay that much?

I also had a thought for BankerRed. I assume that you only charge a per day fee when the account is actually overdrawn. That is how ours are, and we are adding these fees to the total overdraft fees.

Jonesie,
Our disagreement on the value of providing a continuously accurate total may be based on my belief that these people, as a class, do not open their bank statements anyway. I think the idea of protecting them by putting these amounts on their bank statement is some sort of a cruel joke.

Now, if someone came up with the idea of mailing them an annual information return with their aggregate fees...

The comments are correct, you only have one way to display those totals, and the overdraft fee total must be inclusive -- you can't break it into separate pieces in the tabular disclosure.

As for disclosing the rebated amounts, I don't offer a judgment on the value of making the adjustment or not. I only suggest that there is only one way to do it correctly, and listing it separately isn't it.

I personally don't disagree with that statement - it would probably depend greatly on the cost to the bank for the programming that may be necessary to accomplish this feat correctly, as John as iterated.

Thank you so much for your opinions. You are absolutely correct that the cost of programming to adjust the fee totals for rebates is prohibitive. In our case, since rebates do not distinguish between fees originally charged when items are returned vs. when items are paid, we would also be looking at systemic changes in the way rebates are processed by customer service folks, new procedures, training for thousands of branch employees, etc. etc.

That said, my line of business partners would still like to disclose fees rebated on a separate line. I am thinking that, since regulations do not prohibit us from displaying rebated fee totals, perhaps we can display the fees according to the new Reg DD requirements, within the prescribed table, and then show the rebated amounts below, but outside of the box. Do you think we are "pushing the envelope"?

I do not. The commentary says you cannot net them against the current month's fees. It does not say you cannot create a separate, additional disclosure not required by law. However, it might be prudent to put a little distance between it and the two required disclosures.

Also, it might be a good idea to have the information appear only on statements where it is relevant; i.e. if I see a "Refunded OD Fees" box on my statement with a zero balance it might give me the idea that I need to have some of my fees refunded too!

While we are "blue skying," if I am in charge of this area, I would like to have periodic reports regarding the dollar amounts of refunded fees broken down by who authorized the refunds.