When an NSF item is paid rather than returned, should that fee (NSF Item Paid Fee) be disclosed on the periodic statement in the same manner as we disclosure total daily overdraft fees and total returned item fees, or are these fees exempt from 230.6(a)(3)?

bb

Since it's not a defined term, what does your bank charge the NSF Item Paid fee for? Whatever the fee trigger, it's a fee that has to appear on the statement.

If the NSF fee is for paying an item drawn on unavailable funds (funds subject to a Reg CC hold), it's an overdraft fee under Reg DD Section 230.11(a) and has to be included in the monthly total grid mandated by 230.11(a).

We have ours broken down as:

1) NSF Item Fee (Paid)
2) Return Item Fee (Returned)

Fraud Pup -- Are those the captions you're using in the grid totals on periodic statements? Or are they the fee descriptors you use in your TIS disclosures and on statements for the individual fees in the transaction history part of the statement?

JB,

Our grid shows:

Total for this per. Total YTD
OD Fees 22.00 22.00
Return Item Fees 0 88.00

So, I guess it's OD Fees rather than NSF Item Fees.

I must have been thinking from years ago. I think they were just called "NSF Item Fees" back then. Does this make more sense?

Well, that's not how I typed it in.

You can see that to the left, the Row Headers would be "OD Fees" and "Return Item Fees" and the Column Headers would be "Total for this Period" and Total Year to Date". In this example, the customer had $22 in OD Fees on this statement, which made a total of $22 year-to-date. He had 0 in Return Item Fees for this statement, but has had $88 year-to-date.

Just a heads up, FP. It should read "Total Overdraft Fees" not "Total OD Fees." That's one of the items in the Fed's proposed clarifying amendments to Reg DD that haven't yet been finalized.

Doesn't the fee on the statment have to match the grid on the bottom i.e. for a NSF item paid it should say overdraft fee to correspond witht he grid that says overdraft fee and the same for returned item fee.

Or is it ok to have the statement say NSF item paid and just make sure it ties to the correct item in the grid.

Thanks, John. I'll get that information to my bossman.

Have a good weekend!

That's what I used to think, too. After all, there is a rule in Reg DD about consistency of terminology.


HOWEVER, that's not what the Fed wants. It doesn't require that you mess around with what you call your overdraft fees, but it does want you to use the phrase "Total Overdraft Fees" in the statement disclosure that's required by §230.11(a), modeling your disclosure after the one in Model Form B-10. The Fed has issued a proposed "clarifying" amendment to Reg DD that would make that clear, and carve out an exception to the "consistent terminology" requirement. You'll find a copy of the proposed amendment Federal Register document HERE.

Thank you both for your comments. I appreciate the update on language consistency issue - I have just returned the compliance arena after being away for a couple years and I wasn't aware of this new interpretation.

Thanks again.

bb

As it happens, the Fed announced its final amendment rules for Regulations E and DD today (Friday, 5/28/2010). They substantiate what I posted above. The final rules will be effective 30 days after they are published in the Federal Register, except for the rule about the mandatory use of "Total Overdraft Fees" in the Reg DD §230.11(a) disclosure, which will be effective October 1, 2010. I am in the process of updating the BOL ABC Soup copies of Regs. E and DD now.

Because the Reg DD-Overdraft clarification does not specifically say, is it ok to have the statement say Overdraft item paid to describe insufficient items that are paid and to state Overdraft Items Returned for insufficient items that are returned? These items do correspond to appropriate vebiage in the required grid.

Those two phrases are certainly acceptable. You do need, I believe, to have consistency in your labeling of the fee for "Overdraft Items Returned" whether the term is used within the statement as a fee is assessed, in your account disclosures and fee listing, and in the statement totals required by Regulation DD §230.11(a).

As for your use of "overdraft item paid," that's fine for your fee list and account disclosures and in statement detail when the fee is assessed, but you cannot use anything other than "Total Overdraft Fees" when summing this fee in the grid required by §230.11(a). The regulation's interpretations allow that one inconsistency.

Thank you!

Our periodic statements reflect the grid as:

__________________ Total For this period total Year to date

Overdraft item fee $ $
_________________
Return item fee $ $
_________________
do we need to change what we currently have "overdraft item fee" to "Total overdraft fee" as is referenced on this post...which was effective on October 1, 2010.

thanks,

As I read the Regulation DD, in the Appendix B-10 under Model Clauses. The grid items must be titled [u]Total Overdraft Fees [/u]and [u]Total Returned Items Fees[/u]. You can have something different in the body of the customer's statement such as Overdraft Fee Paid or Overdraft Fee Returned that is ok as long as it matches your Schedule of Fee disclosure and ties to the right box in the grid.

okay thanks...Is it okay to leave "return item fees" as is,
there is a comment on the federal register that states...."comment 230.11(a)(1)-3 states that institutions may use terminology such as "returned item fee" or "NSF fee" to describe fees for returning fees unpaid. These fee totals must be disclosed in a tabular formt substantially similar to Sample B-10."

thanks,

If you are reporting exactly as you have shown, you will need to change everything. It doesn't have the appropriate language and it's not the appropriate format as the model.