Skip to content
BOL Conferences
Thread Options
#1293248 - 11/25/09 02:14 PM Reg. E changes - existing OD protection programs??
Aggs Offline
Diamond Poster
Aggs
Joined: Nov 2009
Posts: 1,331
Hoosier Country
I'm hoping someone here can help me. I'm running a meeting on this next week and I've already written a detailed 7-page summary of the changes. I thought I had it all figured out and then someone stumped me with a question. I've read that thing multiple times, so I am either missing the answer (very possible) or it's not something that was discussed or finalized.

Question - for existing customers who ARE enrolled in some kind of an OD protection program (checking linked to savings, customer opened an OD protection line of credit, etc.) - how do we handle the opt-in process for them?

To clarify, we will be notifying all customers (new and existing) of the opt-in, as required. A senior manager asked - "What if someone doesn't opt in, but they have OD protection? Are we allowed to charge them the small transfer fee that occurs if they OD their account with an ATM or one-time debit card transaction? Are we allowed to even authorize that transaction if the money is not available in their account?"

These people are used to having this OD protection and so I don't believe we can just start declining their transactions.

So how do we handle this? Do these people HAVE to opt-in in order for us to accomodate them? Or do we explain in our notice to existing customers that the opt-in requirement does not apply to them if they are already enrolled in an OD protection program?

Also, what if we pay the ODs and make the OD transfer from savings and then charge them the $7.50 fee - can they complain and use Reg E to justify that they should not be charged since they didn't opt in?

Head spinning.... Most likely I am overthinking it and the answer is right in front of me. Any help would be greatly appreciated!
_________________________
CRCM + CAMS = certified compliance nerd

Opinions expressed in these threads are my own and not my employer's.

Return to Top
Deposits and Payments
#1293303 - 11/25/09 02:37 PM Re: Reg. E changes - existing OD protection programs?? Aggs
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Your homework assignment is to write this on a white-board 100 times: "Definitions."

The opt-in requirement applies only to "overdraft services." "Overdraft service" is a defined term in section 205.17(a). It specifically excludes "any payment of overdrafts pursuant to ... a line of credit subject to ... Regulation Z, a service that transfers funds from another account [of the consumer], or a line of credit or other transaction exempt from ... Regulation Z [involving securities or commodities accounts]."

You were right! The answer is right in front of you.

And you get an exemption from the homework assignment in honor of Thanksgiving.
Last edited by John Burnett; 11/25/09 02:40 PM.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1293438 - 11/25/09 03:41 PM Re: Reg. E changes - existing OD protection programs?? John Burnett
Aggs Offline
Diamond Poster
Aggs
Joined: Nov 2009
Posts: 1,331
Hoosier Country
See, I knew I was completely overlooking it. THANK YOU!!!

And thanks for the exemption from my homework assignment wink

This is one of those instances where I've read something way too many times and couldn't find a simple answer afterwards... LOL
_________________________
CRCM + CAMS = certified compliance nerd

Opinions expressed in these threads are my own and not my employer's.

Return to Top

Moderator:  John Burnett