Can a business "Opt in" for Reg E if the bank doesn't offer an overdraft program? Since Reg E doesn't affect businesses, bookkeeping says they "opt in" businesses so they can charge them on debit cards. Something about this doesn't seem right.

Draw a circle and label it "Regulation E" including its manufactured terms; e.g. "opt in." Then put a dot outside the circle. The dot is your business customer.

A business customer can overdraw its account via any sort of a debit ranging from a check to a debit card. There is no official language penned by the Federal Reserve indicating a business customer is too dumb to know that. Only consumers are adjudged too dumb to know that. In short, there is nothing for a business customer to "opt in" to, they used a debit card when they did not have enough money and it overdrew their account. You charge them a fee. End of story.

I'm mystified about what the folks in bookkeeping are doing though. They are flipping some switch at the account level that enables the overdraft?

An overdraft is a loan. If it's a sole proprietorship, the individual owes you the money. If it's a partnership, corporation, or an LLC its not that simple. The decision to allow business customers to overdraw their accounts via any method should not be made by the people in bookkeeping...

Here's what may be happening -- the business has one or more debit cards on its account. Occasionally, although debit cards ordinarily reject if there are insufficient funds at the time of the attempted use, occasionally, the same things happen to the business debit card requests as happen to consumer card attempts. They succeed because there is only a token $1 authorization made (some gas pumps) against actual transactions of $50 or more. Or there's a time lag between the authorization and presentation of the live debit, and other debits have interceded. The debit card transaction can't be bounced for NSF, so an overdraft is created.

For a consumer account, the bank cannot charge an OD fee if there's no OD service or the consumer hasn't opted into an OD service. For a business account, the bank can charge an OD fee regardless.

You may need to look further into how your core is set up. It sounds like they are trying to manipulate settings for consumer OD to allow the charging of fees on a business OD. That is the wrong way about it, as your core should have static settings based on if you have coded the account as business or consumer. On our business accounts there is no opt-in option, when using that product the OD program field is coded correctly based on bank settings.