I have a simple question that I have regarding how I am reading the new rules.

Are we required to post a notice at ATMs stating that an ATM withdrawal may OD the account? I read that somewhere but I do not see it when reading 230.11

Thanks in advance.

If a financial institution decides to offer a second balance that includes the dollar amount of a discretionary overdraft limit on an automated system. This will continue to be considered an advertisement promoting the payment of overdrafts. Therefore, there are a couple of additional disclosures that would be required specific to ATM screens:
• The fee or fees for the payment of each overdraft; and,
• The time period by which the consumer must repay or cover any overdraft.

If you don't offer the "puffed" balance at the ATM screen (and you can't really on another bank's machine), there is no regulatory requirement that you alert the customer about possible overdrafts. There is, however, "best practice" guidance in the 2005 Interagency Guidance on Overdraft Protection Programs documents that suggests that banks post a general alert at machines to the effect that transactions at the machine may overdrawn the cardholder's account.

Simple question, probably not a simple answer: How does any of this apply to transfers created online or through mobile banking if the transfer may hit the overdraft balance?

We currently provide the "puffed" balance at the ATM screen and through online banking, which then flows to mobile banking.

The scratch the surface reading I've done only refers to ATM and one-time debit transactions as requiring an opt-in at the time of the transaction. No mention of client-generated transfers.

To start with, make sure that you disclose the "unpuffed" balance at ATMs and online. You can disclose the puffed balance, too, but starting on New Year's Day, you must show the unadorned, unenhanced, unpuffed balance. The "puffed" balance has to be identified as including overdraft funds. If the extra funds come from paying the account into an overdraft that won't be cured through a transfer from other funds of the customer or from an overdraft line of credit, you have to add information to that puffed balance (as required by Reg DD sectin 230.11(b)(1)) -- two of those items of information can be omitted at the ATM. The requirement for the extra information has been in effective since 7/1/2006.

The Reg E amendments that will be effective 7/1/2010 do not affect transfers created online or through mobile banking unless a debit card number is used to effect the transfers (online merchant purchases with a debit card account number would be affected). And there's nothing in the rule about opting in at the time of the transaction.

Gracias, John. You cleared up an issue we've been discussing regarding transfers.

BTW, John is teaching a webinar on this, in case you haven't seen it.

http://calendar.bollearningconnect.com/main.php?view=event&eventid=1258475828823

I just need to clarify ...
A "Loan-o-Matic" (revolving line of credit attached to a checking account that advances in pre-determined increments when the checking account becomes overdrawn) is considered an Overdraft Plan, correct? So if we're disclosing a "puffed up" balance we'll need to change that, too....right?

Yes. Your "Loan-o-Matic" product fits in this requirement at 230.11(c):

Thank you, John!

Can anyone confirm if the actual gridlines are required on periodic statements for the overdraft and returned item fees?

The FRB answered that exact question in their audioconference on 12/10. Their response was "yes".

We do not have an overdraft program. Customers have the option of tying their savings or line of credit to their checking if they like. If we are going to list the "second balance" on our ATM (or internet banking), must the description state the exact words of "overdraft funds"??

Would the wording "Acct Balance" for the "unpuffed" balance and "Avail Transfer Balance" for the "puffed" balance be okay?

Any thoughts or opinions are appreciated!

The regulation specifically states that you must indicate that the "puffed" balance includes overdraft funds. I'd use exactly the wording, if possible.

Thank you John! This was my opinion also.

A coworker has a daughter that works at a large national bank. They were discussing the fact that as of 1/1/10 ODP funds would no longer be available in her balance. The daughter indicated that they had given their customers the opportunity to opt-out of this practice. I am trying to get a copy of the opt-out notice to see what it exactly says, but this isn't allowed under the rule, correct?

We are a national bank and there is no "opt in or out" option with the Reg DD rule, effective 1/1/10, that available balances through an automated system can not include OD funds. You can not include OD or transferable funds in the available balance, unless you list a second balance which does include these funds.

The only opt in issue I know of is with Reg E and the opt in to pay ATM and one-time Check card overdrafts which is effective 7/1/10.

Hope this helps.