Does the bank need to disclose the changes to the OD Program to existing customers as far as the new changes that went into effect 7/1/11? I'm trying to get an answer prior to my FDIC compliance exam next month. Any help would be appreciated.

Your program had a set of features before you made changes and some of those features were changed. Some of the changes may be such that you will have to notify existing customers; others won't. It will depend on what you've told them before, what changed, and whether there's a regulatory requirement for a change in terms notice triggered.

One example -- Suppose that BEFORE you charged $35 per overdraft paid with no ceiling and no de minimis overdraft amount all properly disclosed under Reg DD, and AFTER you charge $35 per overdraft, with a three-fee ($105) maximum per day, and won't charge if the account is overdrawn $25 or less. Because both of the changes are beneficial to your customer, you don't need to provide a change in terms notice under Reg. DD (although you will arguably have to disclose the de minimis OD amount in your Reg DD account disclosures for new customers, and will have to disclose both the cap and the de minimis in disclosures under Reg. E §205.17).

If any of your fee amounts are being increased as part of the project, that will be adverse to the customer, so you'll have to do a change in terms notice for those changes.

John, I have a follow-up question to your statement that "... although you will arguably have to disclose the deminimis OD amount if your Reg DD account disclosures for new customers...."

We currently disclose the de minimis in the overdraft program disclosure that we provide to the customer. (This is separate from the Reg DD disclosure.) What section in Reg DD would require that we disclose the de minimis & do we also need to disclose it in the Reg DD disclosure in addition to the overdraft program disclosure?

Thanks.

IMO, the requirements of Reg DD §230.4(b)(4), which call for disclosure of the conditions under which a fee may be imposed, will require the disclosure of the de minimis OD amount.

I want to ensure that I understand your above example, because it applies to us. I understand that per Reg E, the A-9 needs to include the new caps and deminimis amount.

(1) Reg DD - 230.4(b)(4)5 - If we need to disclose the de minimus, why wouldn't we also need to disclose the cap?

(2) On our fee schedule, we disclose:

Overdraft Paid Fee
Per item fee for covering overdraft created by check, in-person withdrawal,
ATM withdrawal or other electronic means $ 32.00

Now, we need to add another line that indcates we will not charge the overdraft fee if the account is overdrawn $XXX or less? What about the daily cap fee?

Thanks for helping me sort this out.

Bump

We have no program (ad hoc), but are going to implement both a de minimis and a max daily due to competition. It seems that the advice is to disclose the de minimis under Reg D. There would not be a requirement under Reg E since we do not have an actual 'program'. Also, since it's better to the customer, no 30-day prior notice would be required.

Is this correct?

Yes. There's no need to disclose OD fee information under Reg E unless you're doing something with §205.17.