I was wondering if anyone could tell me if the new additional disclosure requirements for overdraft services (effective 01/01/10) are applicable to business accounts.

Thank you in advance for your help.

I believe it only applies to consumers (natural persons)who hold the account for personal, household or family purposes. I think, correct me someone, that business accounts are exempt.

I was told that if we currently list Reg DD information on business accounts, such as apy and service charge breakdowns that we now would need to include the additional info as well or remove what we currently give them. We can't pick and choose which Reg DD statement disclosures to give, if you give some you give all.

I disagree with whoever told you that you have to do this on business accounts. Reg DD applies to consumers, not businesses.

Thank you everyone for your help.

It is appreciated.

That "all or nothing" approach may be a limitation of your system provider. It's not a regulatory requirement.

Can someone just outline the changes that I need to have in place 01/01/10? I want to make sure I don't miss something but all I can tell is I need to make sure our statements disclose overdraft fees. What else?

Disclose overdraft fees on the statements and your automated systems have to show any "puffed" balances separately than true balances. Those have to be in place by 1/1/10.

What do you mean by "puffed" balances?

A "puffed" balance is the customer's true balance (what they actually have in the bank) plus any additional money they can access to cover overdrafts. This would include overdraft and other deposit account the account is tied to for overdraft protection AND any "free" discretionary amount the bank will cover for overdrafts.

Thanks Dani

Do these balances also have to be disclosed at ATM's?

They have to be disclosed on any automated system. This includes ATMs, internet, telephone banking, etc.

The "puffed" balance is optional. And you don't have to show a balance at all. But if you do, it has to be the unpuffed balance. THEN you can show the puffed balance, too, if you correctly label it.

If we charge a consecutive day overdraft charge of $5.00/day once an account has been overdrawn for 5 days does this need to be included in our chart breakdown of fees. The staff interpretation says "fees charged for maintaining an account in overdraft status"? Would our $5.00 fee be this?

My understanding is that per diem fees charged once an account is in overdraft status would be considered an overdraft fee. So you would need to include those on your statement disclosures in the box with the other overdraft fees.

Example (assuming 1 OD for January statement):
Fee for overdraft check=35.00
$5 Per Diem OD fee for 5 days=25.00

My statement should show (using the reg model of course)
Total OD for Jan-- 1
Total OD Fee for Jan-- 60.00
Total OD YTD-- 1
Total OD Fee YTD-- 60.00

Don't include the OD count in your section 230.11(a) disclosures. The model form includes a grid, and there are only four items in it (as applicable), and all are dollar amounts, not incident counts.

Sorry. John's right. Not sure what I was thinking. Between RESPA , DD, preparing for E, AND year end....my brain is fried.

How are you guys going to tackel the Reg E portion of this problem.
For example:on Monday your customer has $500 in his or her account. They use thier deit card to purchase something on Monday and the merchant places a 3 day hold on the customers account until the debit comes in to claim it. The customer writes a check for $400 check which clears on Friday. The debit for the purchase dosent come in until the following Monday. We have to pay the item becuase we can not return POS. We also charge the customer a NSF fee. We do not offer a offical overdraft program but i guess this considered an un offcial program by default. How can we mandate immediate debit to our customers account and forget about the hold?

There's really nothing you can do. You can't charge the fee unless the customer has opted in. And unfortnately there's not much (meaning nothing) you can do about when the merchants settle there POS machines.

The Fed made it clear that it hopes the industry will do something to push MC and Visa to "encourage" merchants to batch out promptly. Even better would be to push the industry to abandon the current delayed presentment and move to a new infrastructure that works more like the PIN-based system in which transactions are finalized in real time and settlement of the network is batched on a daily basis (the ATM network model).

In a few replies earlier, it says we have to label the "puffed" balance. How do we correctly label it? On our online system, it provides a link to describe the amount. However, if we just have 2 balances on the ATM, one the actual balance and one with the overdraft balance. How do we make sure we distinguish between these 2 balances?Also, if we only give out one balance, that balance must be the actual customers balance (without overdraft limit), correct?

Prior thread that expands your dilemma to non proprietary ATMs.

They really don't want you to do it so they really do not care how hard it is.

OK. Here's the thing about providing two balances at an ATM. First, the "puffed" balance has to be labeled as including those other funds, and indicate if they might not be available for all purposes. How to label them? Well, if the puffed balance is available for all kinds of overdraft service, then you can simply say the balance "includes overdraft funds." Or you could get more detailed and say "includes funds from other accounts" or "includes available line of credit." But "includes overdraft funds" is specifically used in the example in the regulation and commentary, so I'd use that. But, after 7/1/10, if the customer doesn't opt into overdraft service under Reg E 205.17, the label would have to also include "not available for all transactions" in the label.

On your last question, correct.

Now, here's the other thing about including the puffed balance. Go back to Reg DD section 230.11(b)(1). You'll see that displaying the puffed balance triggers two other required statements if the balance appears on the screen. If the puffed balance appears only on the receipt, 230.11(b)(1) won't apply. Those two statements?

• The fee or fees for the payment of each overdraft (and that includes all fees); and
• the time period by which the consumer must repay the overdraft.

That requirement may be so onerous for banks to comply with -- it can't be done at network machines to my knowledge -- that they won't be displaying the puffed balance at all.

Does this include Telephone systems as well?