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#1637187 - 12/08/11 09:17 PM REg E Opt-ins and Bank Acquisitions
GoGreen Offline
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Joined: Dec 2007
Posts: 288
PA
I am wondering if we could change in terms notice for overdrafts. Why I ask is the opt-ins from the acquired bank would come over to our files. If we did a mailing to the opt-in, customers about change in terms for overdrafts and customer may revoke.

How are others handling the REG E overdraft opt-ins with bank acquisitions?

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#1637416 - 12/09/11 03:51 PM Re: REg E Opt-ins and Bank Acquisitions GoGreen
CM-Compliance Offline
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Joined: Oct 2011
Posts: 58
Missouri
I am also interested in how to handle the Opt-ins with a bank acquisition....

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#1637929 - 12/12/11 03:56 PM Re: REg E Opt-ins and Bank Acquisitions CM-Compliance
John Burnett Offline
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John Burnett
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Regulation E gives those customers who opted in an ongoing right to revoke that action, and that right survives the acquisition of the bank. Obviously, if you're going to change the terms under which you operate your overdraft payment service, you'll have to inform the affected customers. I think that it's wise, even if not required, to include a statement that the consumer can revoke any earlier acceptance of the service, and provide information on how it may be done with the acquiring bank.
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#1638764 - 12/14/11 02:43 PM Re: REg E Opt-ins and Bank Acquisitions John Burnett
GoGreen Offline
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Posts: 288
PA
We have deceided to do a REG E opt-in mailing as the acquired bank had a ODP program and we do not. It was a decision to be on safe side and not take the risk of moving REG E opt-ins codes to our systems. The mailing is also customer eduaction on our standard overdraft practices.

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#1638782 - 12/14/11 02:58 PM Re: REg E Opt-ins and Bank Acquisitions GoGreen
John Burnett Offline
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John Burnett
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Cape Cod
A cautionary suggestion, GoGreen:

If your bank is not planning to offer to authorize ATM and/or one-time debit card transactions that would overdraw a consumer's account -- which would generally require that you assign a consumer an amount by which you'd "puff" his balance for the purposes of authorizations, an attempt to get consumers to opt-in under Regulation E is likely to be viewed as a UDAP.

You'll also need to notify those opted-in customers from the acquired bank that you won't be providing overdraft services for card transactions, thus voiding their earlier opt-ins.

If, on the other hand, you plan to add what you're calling an overdraft protection program (which I assume is an automated overdraft payment program), then your Reg E opt-in solicitation would make sense. Just be sure, if you are FDIC-supervised, that you adhere to their November 2010 Guidance on such programs.
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#1784360 - 02/08/13 08:21 PM Re: REg E Opt-ins and Bank Acquisitions John Burnett
Frank Ernest Offline
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Somewhere on a beach
Do you see a problem with maintaining the acquired bank's customers that opted in as being opted in with us?
What if the acquired bank did not keep records of each customer that opted in, other than making the entry in the computer that they did so?
I wouldn't want to inconvenience customers who were opted in by having them opt in again with us before we would cover their overdraft, but I am not sure if the regulators would have a problem if we can't provide "documentation" that each of the former banks customer did opt in.

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#1784478 - 02/08/13 11:16 PM Re: REg E Opt-ins and Bank Acquisitions GoGreen
rlcarey Online
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rlcarey
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Galveston, TX
It is purely a risk decision to be made by the acquirer.
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