If we want to decrease the daily limit at our ATMs, must we provide advance notice under Reg. E? Our current disclosure states that we may change the limits at anytime without notice sufficient.

Thanks for the input!

From Regulation E:

(a) Change in terms notice. (1) Prior notice required. A financial institution shall mail or deliver a written notice to the consumer, at least 21 days before the effective date, of any change in a term or condition required to be disclosed under § 1005.7(b) of this part if the change would result in:

(i) Increased fees for the consumer;

(ii) Increased liability for the consumer;

(iii) Fewer types of available electronic fund transfers; or

(iv) Stricter limitations on the frequency or dollar amount of transfers.

I have a similar issue. We want to increase our debit card limit permanently. I understand in our case that when a permanent change is made a disclosure should be sent within 30 days of the change. Management doesn't feel we do need to send a notice since this is a positive change to the customer. What do you think?

Even though a "loosened" limitation may not require notification, it might be a good idea to disclose. To play devil's advocate, there could be a situation where a customer avoids using his or her debit card or splits a withdrawal into 2 or more withdrawals over several days due to not knowing about the new limit. Disclosing would save the customer those inconveniences.

It may not be a positive change if their card is compromised and more funds are taken out of their account than what they thought was the limit. I would send the advance notice.

Played the same scenario as GuitarDude just last week. Why increase the limits and not notify customers?

I used to speculate as Susielou has, but I believe that is stretching what is considered detrimental to a consumer and wouldn't hold up the change if the bank felt it a positive. I certainly would notify the customers of the increase, but not necessarily in advance.

I agree with Susie -- cardholders can be held liable for amounts more than an authorized amount. But it seems unfair if they don't know a higher amount may be applicable. I.e. -- my daily dollar limit is $500. I let my grandson use the card to draw out 200 knowing he could get 500. But I didn't receive the notice yet and it is now actually 800. I would complain about the additional 300.

Also, this issue has arisen with the use of teller assisted ATMs. Apparently if the office is open, even if a teller isn't standing next to the customer, the customer's daily limit isn't applicable? I think these pseudo ATMs are still confusing people (I've never used one). It just makes sense to inform people in advance; especially since regulators seem to care less and less what the bank thinks is good for customers versus what the customers think.