Learn More - Click Here!

Thread Options
#1370605 - 04/07/10 05:17 PM Sending out the Opt In notice early
Compliance101 Offline
Gold Star
Compliance101
Joined: Oct 2004
Posts: 473
Tennessee
We are planning on sending existing customers an opt in notice and obtaining one from the new customers earlier than the effective date of the regulation. Is this ok? What are other banks doing?
_________________________
"No one can make you feel inferior without your consent."
Eleanor Roosevelt

Return to Top
Operations Compliance
#1370614 - 04/07/10 05:22 PM Re: Sending out the Opt In notice early Compliance101
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,963
TN
It is acceptable as long as you have the ability to comply with the regulation. If the customer decides not to opt-in your institution must follow the Reg E requirements early - no fees for one-time debit card transactions that cause overdrafts. We will not be doing this until June.
_________________________
My Opinions Only

Return to Top
#1370620 - 04/07/10 05:32 PM Re: Sending out the Opt In notice early Skittles
Compliance101 Offline
Gold Star
Compliance101
Joined: Oct 2004
Posts: 473
Tennessee
Ok, if we do send out the notices early and explain it will not take effect untill the effective date of the regulation, will this suffice for us to comply on the effective date instead of earlier?
_________________________
"No one can make you feel inferior without your consent."
Eleanor Roosevelt

Return to Top
#1370891 - 04/07/10 08:45 PM Re: Sending out the Opt In notice early Compliance101
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,629
Cape Cod
Some "sources" have apparently said so. I can't see where they have the blessing of the Fed for that belief. And the Fed said that it is the FRB Board's "expectation" that banks would turn off fees promptly if they receive what amounts to an "opt-out" from a consumer in response to the delivery of opt-in notices.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1371841 - 04/09/10 03:27 PM Re: Sending out the Opt In notice early John Burnett
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Agree with John; "Heard it, but ain't seen it."

Leaving the opt-out box on the A-9 creates a likelihood of an opt-out response. If a customer attempts to opt-out prior to the effective date you plugged into your A-9, you need to facilitate it.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1372552 - 04/12/10 02:47 PM Re: Sending out the Opt In notice early Elwood P. Dowd
lblu Offline
Gold Star
lblu
Joined: Sep 2003
Posts: 273
Based on the 2/26/10 ABA analysis of this question, it appears that their opinion is that we can begin to Opt-in customers early as long as it is very clear that the service and choice will not be effective until the designated dates. "... the Supplementary Information states that if a notice is sent early and the customer responds by declining the service, the Federal Reserve Board staff would ―expect a bank to honor that choice not to opt-in. While we do not believe such a gratuitous statement that was not actually incorporated into the regulation or commentary requires such a customer response to be immediately implemented before the regulatory deadlines and requirements in the rule, it may open the door to litigation risk". "Banks that choose to send notices before they are operationally ready to permit customers to opt out should state clearly in the notice and consent form (and the written confirmation), the date when the choice will be effective."
_________________________
CRCM

Return to Top
#1372567 - 04/12/10 03:05 PM Re: Sending out the Opt In notice early lblu
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
By "ain't seen it," I meant from the Fed. wink I've read lots of things elsewhere, but the Fed's is the opinion that matters.

The risk entailed by ignoring a clear statement in the supplementary information is more likely to be described as "regulatory risk" not "litigation risk."
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top

Moderator:  Andy_Z, John Burnett