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#1390042 - 05/12/10 09:41 PM Re: Reg E Revisions Announced John Burnett
Tryin-2-Comply Offline
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Joined: Apr 2003
Posts: 202
Hills of TN
I have a question regarding fees on debit card / ATM transactions. When we pay our items we pay largest to smallest - the problem we have is during our testing - this is what we have.

Bal. $45.00
ck $3.00 - cleared after the pre-auths
pre-auth debit $12.00
pre-auth debit $42.00
pre-auth debit $10.00

Operations is telling me that we pay largest to smallest - and i agree, however, they are telling me that we would only charge 1 NSF fee because of some regulation - because the customer had enough money to cover the two debits and can only be charged for the one that they didn't have enough money for.

I cannot find anything related to this - but they say this was back in 2002 or 2003.

If our deposit agreement states we pay largest to smallest and the customer opts-in to REG E - then, why can't we charge for the two items that cleared later when they didn't have enough money to cover those items.

Any help is appreciated.

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#1390535 - 05/13/10 05:00 PM Re: Reg E Revisions Announced Tryin-2-Comply
Reads Regs Offline
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Joined: Nov 2004
Posts: 2,294
Could it be a state law issue? I don't recall anything on the Federal level from 2002 or 2003 that would affect this. The agencies came out with their best practices guidance on overdraft protection in February 2005 that suggested you disclose your posting order and perhaps limit the total number of overdraft fees charged per day.
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#1390941 - 05/14/10 02:15 AM Re: Reg E Revisions Announced Reads Regs
BNKO Offline
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We have an overdraft privilege service that checking account customers are automatically enrolled in after 30 days of opening a new account. They are provided a brochure on this service at account opening and can opt-out of this service if they want to.

Due to the new Reg E opt-in requirements, management wants to change the current process from automatically enrolling to having the customer opt-in/opt-out of the overdraft privilege service at time of account opening.

My question is this: Can we combine the overdraft privilege opt-in/opt-out disclosure with the Reg E opt-in disclosure (ATM and one-debit transactions), or would we need to provide two separate disclosures?

Thanks

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#1391057 - 05/14/10 02:04 PM Re: Reg E Revisions Announced BNKO
John Burnett Offline
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John Burnett
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Cape Cod
Two separate disclosures, because you can't include extra info in the Reg E opt-in disclosure. You can include them in the same set of disclosures, I think, so long as they are clearly separate undertakings in the forms. Make very sure that the consumer can see that opting into the OD privilege service is one step that won't cover card transactions, and that opting into coverage for card transactions is an "add on," like ordering a moon roof in a new car.
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#1391098 - 05/14/10 02:41 PM Re: Reg E Revisions Announced John Burnett
BNKO Offline
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Joined: Sep 2009
Posts: 213
Thanks, John.

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#1392088 - 05/17/10 06:16 PM Re: Reg E Revisions Announced BNKO
dcl1963 Offline
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Joined: Feb 2006
Posts: 177
LA
I saw the earlier discussion that the confirmation of opt-in can be a "carbon" of the opt-in or form or a mail out. Just curious of what some of you will do, copy of opt-in, letter or post card. We are leaning toward mailing a post card to the customers who opt-in but are working on the wording to comply but not give too much information since it is a post card.
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#1392099 - 05/17/10 06:27 PM Re: Reg E Revisions Announced dcl1963
Bullseye Offline
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Originally Posted By: DCL, CRCM
I saw the earlier discussion that the confirmation of opt-in can be a "carbon" of the opt-in or form or a mail out. Just curious of what some of you will do, copy of opt-in, letter or post card. We are leaning toward mailing a post card to the customers who opt-in but are working on the wording to comply but not give too much information since it is a post card.


We are making a copy of the opt-in which lists their intentions, account number and has their signature. We are dropping it in an envelope with the revoke as a stuffer.

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#1392119 - 05/17/10 06:57 PM Re: Reg E Revisions Announced dcl1963
John Burnett Offline
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John Burnett
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Cape Cod
Originally Posted By: DCL, CRCM
I saw the earlier discussion that the confirmation of opt-in can be a "carbon" of the opt-in or form or a mail out. Just curious of what some of you will do, copy of opt-in, letter or post card. We are leaning toward mailing a post card to the customers who opt-in but are working on the wording to comply but not give too much information since it is a post card.


My personal opinion (and it really is just my opinion) is that a post card might be less expensive, but I wonder whether it's the best choice. How can you provide the customer the needed information for the opt-in without letting any casual reader of the card know that the customer has an account with you?
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#1392265 - 05/17/10 08:31 PM Re: Reg E Revisions Announced John Burnett
dcl1963 Offline
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Joined: Feb 2006
Posts: 177
LA
Thank you for the replies; and John, that is the problem we are addressing right now regarding the all eyes can see the info on the postcard. We were given the sample on Friday and are concerned about it; also pricing a self mailer instead of a post card.
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In God we trust, all others pay cash. . . Jean Shepherd

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#1392607 - 05/18/10 03:59 PM Re: Reg E Revisions Announced John Burnett
West_Delta Offline
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Joined: Nov 2009
Posts: 37
Kentucky
John,

I may have missed this somewhere, but can an email sent to a customer constitute "written confirmation", or does this confirmation need to be mailed or delivered in person?

Thanks,

WD

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#1393348 - 05/19/10 03:33 PM Re: Reg E Revisions Announced West_Delta
John Burnett Offline
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Cape Cod
Straight from the regulation, Regulation E, §205.17(b)(1)(iv):

(iv) Provides the consumer with confirmation of the consumer’s consent in writing, or if the consumer agrees, electronically, which includes a statement informing the consumer of the right to revoke such consent.

The consumer's consent does not need to be obtained via the cumbersome "demonstrative consent" provisions of E-SIGN. For example, if your consumer has orally opted in using a telephone call, and provides you with his or her email address and says you can send the confirmation by email, you have all the consent you need to do so.
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#1393704 - 05/19/10 09:24 PM Re: Reg E Revisions Announced John Burnett
dcl1963 Offline
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Posts: 177
LA
Regarding notification to existing customers. The Model form gives the box "I do not want" (opt-out)and the "I want"(opt-in). Is it alright to only have a box "I want"? In other words, no response equals "I do not want to pay". All accounts opened prior to 7/1/10 will be set as "I do not want to pay" on our core system unless and until we receive the opt-in. I understood that it is best to follow the model form but maybe I'm wrong.
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#1393726 - 05/19/10 10:31 PM Re: Reg E Revisions Announced John Burnett
auditgirl6 Offline
Member
Joined: Aug 2008
Posts: 88
Here is a silly question:
My bank has decided to not participate in the opt in program. Would we be able to at a later time? I haven't read anything that states "now or never".

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#1393763 - 05/20/10 11:39 AM Re: Reg E Revisions Announced dcl1963
Deena Offline
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Deena
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Posts: 2,701
PA
The "I do not want" is not required. It's fine to just have one box for the customer to opt-in.
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#1393764 - 05/20/10 11:41 AM Re: Reg E Revisions Announced auditgirl6
Deena Offline
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Deena
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PA
I see no reason why you couldn't decide later to implement a program, as long as you follow the reg at that time.
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#1393925 - 05/20/10 03:23 PM Re: Reg E Revisions Announced Deena
dcl1963 Offline
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Joined: Feb 2006
Posts: 177
LA
Thanks Deena! I read your answer after I finished re-reading the reg again and some BOL training material and now understand that the "I do not want" is not required.
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In God we trust, all others pay cash. . . Jean Shepherd

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#1394239 - 05/20/10 07:29 PM Re: Reg E Revisions Announced dcl1963
brainOverload Offline
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DFW, Texas
I hope this has not been asked already and I apologize if it has but, I need some reassurance in our decision...

We want to automaticaaly opt-out our Sr account customers and not even send them an opt-in notice. We just won't ever charge them for any ATM or one time debit card transactions that may overdraw their account. Does anyone see any problem with that scenario?
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#1394361 - 05/20/10 10:01 PM Re: Reg E Revisions Announced brainOverload
John Burnett Offline
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Cape Cod
Nope. Just make sure you step through the right disclosures, etc., if one of those seniors requests overdraft service for card transactions and you decide to give in.
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#1394733 - 05/21/10 05:44 PM Re: Reg E Revisions Announced Elwood P. Dowd
cle Offline
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Is anyone planning on limiting the number of times an account holder can opt-in/opt-out from the ATM/debit card transactions?

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#1394744 - 05/21/10 06:01 PM Re: Reg E Revisions Announced John Burnett
brainOverload Offline
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brainOverload
Joined: Jul 2008
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DFW, Texas
Originally Posted By: John Burnett
Nope. Just make sure you step through the right disclosures, etc., if one of those seniors requests overdraft service for card transactions and you decide to give in.


Thanks John...management went the other way on the subject but I have another question:

We are changing the payment order of items due to these reg changes and I am trying to figure out if we need to send a notice to the customer 30 days prior to the effective date or within 30 days after or do we need to notify the customer at all?
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#1394753 - 05/21/10 06:19 PM Re: Reg E Revisions Announced cle
brainOverload Offline
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brainOverload
Joined: Jul 2008
Posts: 275
DFW, Texas
Originally Posted By: cle
Is anyone planning on limiting the number of times an account holder can opt-in/opt-out from the ATM/debit card transactions?


I'm not sure you can limit that...I am courious to know myself.
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#1394848 - 05/21/10 08:03 PM Re: Reg E Revisions Announced Elwood P. Dowd
Busy body Offline
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Posts: 160
Texas
I have a question regarding the requirement for the notice to be segregated from other account disclosures. When July 1 rolls around and we start providing the notice as new accounts are opened, does this mean that we cannot included it in our account opening print group? How do we segregate it from all other disclosures. It will of course be on a separate page...is that sufficient?

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#1395074 - 05/24/10 02:27 PM Re: Reg E Revisions Announced brainOverload
John Burnett Offline
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John Burnett
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Cape Cod
Originally Posted By: brainOverload
Originally Posted By: John Burnett
Nope. Just make sure you step through the right disclosures, etc., if one of those seniors requests overdraft service for card transactions and you decide to give in.


Thanks John...management went the other way on the subject but I have another question:

We are changing the payment order of items due to these reg changes and I am trying to figure out if we need to send a notice to the customer 30 days prior to the effective date or within 30 days after or do we need to notify the customer at all?


There is no regulatory requirement that you disclose posting order. The OTS's February 2004 Guidance on Overdraft Protection Programs is pretty forceful in suggesting, in the section on "Best Practices," that savings associations should "clearly disclose rules for processing and clearing transactions," and not administer or manipulate those rules unfairly to inflate fees. [70 FR 8431], and has issued proposed supplemental guidance that would cause omission of that information to be considered deceptive, and violative of the OTS's Advertising Rule.

The other regulators, in their February 2005 ODP Guidance document, stated that it's a Best Practice for banks and credit unions to clearly explain that transactions may not be posted in the order in which they occurred, and "that the order in which transactions are received by the institution and processed can affect the total amount of overdraft fees incurred by the consumer." [70 FR 9132]

It is not information that is required under Truth in Savings or Regulation DD, nor is it required by Regulation E. So, there is no "change in terms" notification that's mandated by a regulation. If you have, however, disclosed your posting order policy in the past, it's probably a good goal to inform consumers of the change. If if you have NOT provided the information in the past, if you can accurately and intelligibly explain the new posting order, you'll be looked upon favorably, I think, by your examiners.
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#1395076 - 05/24/10 02:32 PM Re: Reg E Revisions Announced brainOverload
John Burnett Offline
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Cape Cod
At some point, particularly if you're dealing with joint owners that cannot agree between them about overdraft service for card transactions, you'll want to have something in policy that suggests you not permit further opt-ins (you can never prevent someone from revoking an opt-in, but you don't have to accept an opt-in), or suggesting one owner set up a separate account if the two owners can't get their act together on the question.
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#1395078 - 05/24/10 02:37 PM Re: Reg E Revisions Announced Busy body
John Burnett Offline
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It's OK to include it with the other disclosures at account opening. It will have to be separate in the sense that it should be a separate sheet or a separate section of a booklet that is set apart from other information. Unlike the other Reg DD and Reg E account disclosures (which can be melded and even combined into a single information flow), these disclosures can't have other information inserted and must all be together. Conceptually, think of them as having a fence or border drawn around them.
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