I'm new at a bank that sends a letter after 90 days if the account meets the requirements to tell the customer that they are eligible for the service (currently no opt out but I believe that coming with Reg E revisions). I say this is advertising the program and therefore needs to meet those requirements (yep, aware of the upcoming revisions to that as well).

Are there any requirements that a bank disclose to it's customers the parameters of it's discretionary overdraft program to customers? My thoughts are No there isnt' a requirement for that - but that if you do it's advertising.

BUMP! Your thoughts please.

Original Anon here, did someone attempt to respond? Reply number 1267709 is just a repost of my original posting.!?

I'd really appreciate any help!

Opt-Out should be part of your Privacy Notice at acct. opening & checking origination and annually.

Offering additional services like ODP is OK if the customer hasn't already exercised/used the Opt-out provision. Also the offer must be made to all "eligible for service" definitions written in your policy.

I don't believe the Privacy Opt Out has anything to do with discretionary ODP. I'm still not sure what the original anon's question is since Reg E doesn't have anything to do with ODP programs and advertising.

My understanding is that if you advise customers of the terms of the ODP, it is considered advertising.

The reference to Regulation E alludes to the fact that the Fed has proposed to add either an opt-in or opt-out requirement for overdraft coverage (whether under a courtesy plan or the old-fashioned way would not matter) for transactions initiated at ATMs or via one-time debit card POS. I don't have a sense as to whether the current discussion in Congress on overdraft fees will prod the Fed to finalize the rule, or to sit on it to see what shakes out of the Congressional debate.

# 1270451 Are you are saying that a bank has discretionary authority to give a customer ODP for their checking account, even if the customer don't want it or need it?

That wouldn't be an offer for a service, just a benifit for having a qualifying checking account. If I didn't agree to have the ODP and I overdraw and close my account that the bank paid on do the same collection of debt rules apply?

Just curious on how that would play out?

Long ago in a distant universe when I was a newbie banker banks paid an occasional overdraft. They did it because they valued the customer as a depositor, average balances were good and the account was established. In other words they did it because the customer had a good track records and because the bank was confident it would be repaid. There was a fee involved, but it was not a big number and certainly not the mainstay of solvency for the bank.

Today, some banks still "do it" that way, although the fee amount has increased over time. The Uniform Commercial Code supports the practice, and makes it clear that a bank retains a right to permit an overdraft and the party creating the overdraft remains responsible for it (in most cases other owners of the account are joined in that liability by contract).

How would it play out? The customer is liable.

That changes if the bank offers (voluntarily or not) and opt-out and the customer does, in fact, opt out.

That wouldn't be an offer for a service, just a benefit for having a qualifying checking account. If I didn't agree to have the ODP and I overdraw and close my account that the bank paid on do the same collection of debt rules apply?

Just curious on how that would play out?

FEDERAL RESERVE SYSTEM
12 CFR Part 205
[Regulation E; Docket No. R-1343]
Electronic Fund Transfers

I guess we know now how ATM & Debit Card Overdraft Fees play out with the Opt-In provisions under Reg. E. Anyone care to discuss how checking overdraft will play out as the domino's fall?