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#2010256 - 04/24/15 07:01 PM OD fees on amounts previously authorized
Rosie O'Grady Offline
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Rosie O'Grady
Joined: Nov 2005
Posts: 438
California
Can someone point me to the regulation/guidance that prohibits institutions from assessing an OD fee in instances where pin transactions presented when intervening transactions have brought the available account balance negative? E.g. The amount on hold is released when the item settles, when the hold is released the funds are returned to the available balance but the account may not have a balance sufficient to pay the amount which had previously been authorized and the customer is assessed an OD fee on an item previously authorized on a good balance.

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#2010287 - 04/24/15 07:34 PM Re: OD fees on amounts previously authorized Rosie O'Grady
Dani York, CRCM Offline
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Dani York, CRCM
Joined: Apr 2005
Posts: 3,663
TN
I think you are thinking about the commentary below. This example was for banks who do not offer an opt-in and only authorize on positive balances.

If you authorize into overdraft and have an opt-in, you can charge a fee, provided your disclosure accurately describes your practice.

Commentary to 1005.17(b) Opt-In Requirement
iv. Application of fee prohibition.
Assume an institution does not provide an opt-in notice, but authorizes an ATM or one-time debit card transaction on the reasonable belief that the consumer has sufficient funds in the account to cover the transaction. If, at settlement, the consumer has insufficient funds in the account (for example, due to intervening transactions that post to the consumer's account), the institution is not permitted to assess an overdraft fee or charge for paying that transaction.
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