I am stuck on a Reg E Opt In process and can't figure out the best way to go. I know we are required to provide the Opt In notice in writing or electronically if the consumer agrees. Our notice then allows the customer to Opt In by phone as one of the methods. A scenario that has come is what if a customer were to call our customer service area saying their card has been declined. Customer service does not want to turn these customers away.

My thought is that while they are on the phone, we would need to somehow provide them the notice before allowing the opt in. I don't think we can rely on the assumption that the customer would have previously received the notice (who knows how long ago) and allow them to opt in. But, I am not sure if it is feasible to try and email them the form while they are in line having their card declined. They may not even have access to email at that time. It would also be a nightmare to opt them in for that transaction (and not charge them) and then change the status back until they have received the notice.

Maybe I am overthinking this, but I just keep thinking UDAAP. How do other banks handle this?

It has been my experience that during examinations, the examiners request a list of Reg E Opt in transactions. They select a sampling and request a copy of the signed Opt In.

When the opt-in rule was in proposed form, your scenario was part of the discussion in some of the comments submitted. The Fed at the time said that they were not going to provide support for that type of opt-in, and there's been no change since then.

There is no requirement that the opt-in be in writing (although both the disclosure and the confirmation must be unless E-SIGN applies). If you have a process that allows for phoned-in opt-ins, you need to have good documentation for the calls.

For our call in opt-ins, the Contact Center rep signs the A-9, notes "by phone" and the date and time. The forms are retained and the calls are recorded. Our system (Horizon) automatically generates a confirmation notification/disclosure that is mailed to the address on file. However, the ability to OD is not "turned on" until the next day... I also do a quarterly QC/KRI on the telephone opt-ins to make sure the notice was mailed (the rep has to check a box to generate the notice, and surprisingly they rarely forget to do it). The Overdraft Department does a daily review of confirmation mailings and they catch even the ones that the reps miss; however, sometimes the notice is not mailed within a day in those cases.

I wouldn't want to allow the account to OD immediately after they opt-in by phone...

Jonn, what do you mean the Fed does not provide support for this type of opt in?

If a bank does allow opt in by phone, shouldn't they read the disclosure to the customer? Have you heard of banks automating this, by navigating the customer to a recording of the disclosure, then pressing something to affirm they want it?