Our debit/ATM cards operate on real time so our main issue is with the $1 pre-auth at a fuel pump then when the actual charge comes in and ODs the account. When this happens can we then contact the customer getting them to opt-in at that time so we can charge the fee and then they are opted-in for future transactions? If they don't opt-in then can we take away their card? We have 2-3 of these per day and don't want to lose the fee income but we also don't want to send our entire customer base the opt-in forms and have to keep up with who did and who didn't when it really only pertains to a few.

If you don't send the forms, you can't charge the fee. Delivery of the opt-in disclosure on paper or electronically (with customer permission) is a condition precedent to obtaining a valid op-in. That means you can't call the customer and convince him or her to opt in; you have to make the disclosure first.

Taking away a customer's card seems a bit extreme if the only problem is that the customer used it at a fuel pump. If, however, the customer creates an overdraft because of using a fuel pump with a token authorization, and does it more than occasionally, you could have a policy of revoking card access for excessively overdrawing the account. Just make sure that's what you want to do, because it will effectively foreclose on any future ability to get an opt-in from that customer (remember, you want the fee income) and it may even drive the customer to the competition.

If we do not send notices and then the customer goes in the overdraft we cannot charge at that time but then would send the opt-in notice and couldn't charge him until we get the notice back, right? If he continues to OD his account via the fuel pump and we don't get the opt-in back then we take away his card, if that's what we choose to do.


So what it comes down to is if we want to do this on a case by case basis we'll miss out on at least the first NSF charge and any thereafter until we get the notice back or revoke their card.

If he continues to OD his account via the fuel pump and we don't get the opt-in back then we take away his card, if that's what we choose to do.


I would reread the latest updates:

However, a consumer who applies, and is otherwise eligible, for a full-service or other particular deposit account product may not be provided instead with the account with more limited features because the consumer has declined to opt in.

Where can I find the latest update information?

So although our debit card agreement says we can revoke the card at any time, Reg. E says we can't do it for not opting-in?

You can not revoke the card simply because they have not opted-in.

You can revoke because the ODs are excessive, BUT you have to use the same standard for that as you would with a person who has opted-in.

Example-- Customers A and B both OD their acocunt with their debit cards 15 times in one month. Customer A has opted-in, but customer B did not. You decide to revoke Customer B's card but allow Customer A to keep his. It looks like you are allowing A to keep their card because they opted in and you get to collect fees. If you revoked both, their would be no appearance of discrimination based on the opt in choice.

I would assume that, if we have a policy to decline ATM/debit card transactions when we know sufficient funds do not exist (in other words, we don't use the opt-in), we can close cards if the customer continues to overdraw their account via ATM/debit card transactions and we can't charge? No problems in this case with giving that customer a less functional account - correct? I guess the thing to worry about is the customer going to our competition because we closed their card.

Our standard for an account to be considered in good standing is positive once every 30 days. If the customer exceeds this timeframe, we suspend the card at that time. If I have a customer overdraw their account once a week to buy gas, but at the end of the week they deposit their paycheck, yes I have lost fee income, but I will not take their card away as my policy will clearly state that the account is in good standing.

The 30 day requirement MUST be the same for opt-in and opt out. If I take out my frustration about the Reg change on my customer because I am losing 1 overdraft fee/week in the above situation, then I will probably lose a customer plus the interchange income they are providing by using their card, not to mention the ramifications from my regulator for violating my own policy.

In other words, stick to your bank's written overdraft policy for all situations.