We have recently changed from an automated overdraft protection program to an ad hoc program. We are looking over our disclosures and are not sure how to tell the customer what we are doing.

Do our disclosures need to be very specific i.e. posting order, when a fee will be charges, how many times we will be charged in a day and that we are not obligated to pay an item that will overdraw the account?

or

Is stating that we will charge a fee (amount included) and what types of transactions can impose a fee?

Here is what I have found:

Reg 1030.11 (b) (i – iv)
b) Advertising disclosures for overdraft services. (1) Disclosures. Except as provided in paragraphs (b)(2) through (4) of this section, any advertisement promoting the payment of overdrafts shall disclose in a clear and conspicuous manner:

(i) The fee or fees for the payment of each overdraft;
(ii) The categories of transactions for which a fee for paying an overdraft may be imposed;
(iii) The time period by which the consumer must repay or cover any overdraft; and
(iv) The circumstances under which the institution will not pay an overdraft.

We added the statement which can be found in the Staff Interpretation of Section 1030.11(b)7:

Do you have a separate disclosure or section just for overdrafts?

We are a small bank and utilize a third party vendor for our forms and disclosures. The OD disclosures relevant to Reg DD are covered on their form as much as their formating will allow. To cover what won't fit in, we have a seperate sheet for additional fees and disclosures such as posting order and the nonpayment statement above.

Not perfect, but no complaints so far from our Regulator (OCC)