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#2160119 - 01/11/18 11:48 AM Courtesy Overdraft OPT in OPT out
Lizz Jane Offline
Junior Member

Registered: 08/07/13
Posts: 45
Loc: Dunkirk NY
We have a customer that is Constantly requesting to OPT in or then to OPT out of the Courtesy Overdraft program. Is there a limit on how many times a customer can go back and forth with Opting in and out. Also does each request need to be documented.

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#2160129 - 01/11/18 11:59 AM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
Adam Witmer Offline
Platinum Poster

Registered: 09/21/10
Posts: 667
Assuming this is an overdraft program covered by Regulation E, I don't know of any limits as the rule says the following:

"(iv) Provides the consumer with confirmation of the consumer's consent in writing, or if the consumer agrees, electronically, which includes a statement informing the consumer of the right to revoke such consent."

Also, I would document each request as you need to prove they had opt'd in for each OD fee you charge.
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advise.

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#2160166 - 01/11/18 01:12 PM Re: Courtesy Overdraft OPT in OPT out [Re: Adam Witmer]
Lizz Jane Offline
Junior Member

Registered: 08/07/13
Posts: 45
Loc: Dunkirk NY
Thank you!

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#2160206 - 01/11/18 03:18 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
Deputy Dawn Offline
Gold Star

Registered: 02/21/07
Posts: 476
Loc: Pennsylvania
Because I'm not confident that we'd be able to produce numerous opt in and consent revocations for a specific customer, I would deny the request for back and forth opt in/opt out/opt in. You may feel you can adequately accommodate one customer....until others start to receive requests from other customers.

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#2160208 - 01/11/18 03:20 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
Ken_Pegasus Offline

10K Club

Registered: 08/30/01
Posts: 21701
Loc: Another trip around the sun
To me, the way that banks implement a decision to not to "opt-in" is ranked in the mysteries of life. In the beginning of this mess (when it focused entirely on checks) my original assumption was that if a customer did not "opt-in" the bank would simply return NSF checks. That made sense to me then. It makes even more sense now; if you don't want us to pay them, we will not pay them. We will just charge you the return item fee instead. If you want to give us permission to pay them, then opt-in and we will charge you the overdraft fee if we decide to pay the item.

It's bank decisions to pay NSF items even though the customer did not opt-in that muddied the water... Opting out of a previous opt-in has no practical effect in most banks because the bank is still going to pay the NSF item, but the customer can certainly change the opt-in at will.

It's when you let the customer opt-in again that the problem is identified. (It's not the customer.)
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My employer agrees with everything I say, but I'm not sure how that helps you.

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#2160225 - 01/11/18 03:45 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
Deputy Dawn Offline
Gold Star

Registered: 02/21/07
Posts: 476
Loc: Pennsylvania
Ken -

My assumption on the original post, that the change of opt in/out was for debit card transactions. Some customers want to pick and choose when they want a POS transaction to be paid (and charged a fee) and when they do not.

Agreed, with checks & ACH's, you are going to incur a fee whether we pay or not. The card transactions are a different animal.

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#2160232 - 01/11/18 03:57 PM Re: Courtesy Overdraft OPT in OPT out [Re: Deputy Dawn]
Ken_Pegasus Offline

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Registered: 08/30/01
Posts: 21701
Loc: Another trip around the sun
Agreed, if we don't have a Reg E opt-in, there will be some occasions where we have an overdraft, but no fee. That's unavoidable.
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My employer agrees with everything I say, but I'm not sure how that helps you.

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#2160234 - 01/11/18 04:00 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
rlcarey Offline
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Registered: 07/16/01
Posts: 65795
Loc: Galveston, TX
If someone was coming in and changing their opt-in and opt out on more than a once in a lifetime basis, I would just cut them a check.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2160255 - 01/11/18 04:49 PM Re: Courtesy Overdraft OPT in OPT out [Re: rlcarey]
Ken_Pegasus Offline

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Registered: 08/30/01
Posts: 21701
Loc: Another trip around the sun
"You can opt-in when we offer it. If we offer it to you again, you can opt-in then."
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My employer agrees with everything I say, but I'm not sure how that helps you.

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#2160431 - 01/12/18 05:30 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
John Burnett Offline

10K Club

Registered: 10/27/00
Posts: 36678
Loc: Cape Cod
Under §1005.17 there is no limit on the consumer's right to opt-out. But you can always limit the consumer's ability to opt in. Or, you can show the consumer the door.
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John S. Burnett
BankersOnline.com
Professional Compliance Nerd since 1976
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#2160520 - 01/16/18 11:36 AM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
Lizz Jane Offline
Junior Member

Registered: 08/07/13
Posts: 45
Loc: Dunkirk NY
Thank you for the suggestions and comments - I have spoken with the Manager further in regards to this customer and I told her to monitor this customer - if he becomes NSF again we will be closing his account.

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#2160895 - 01/18/18 12:04 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
rginTX Offline
Junior Member

Registered: 07/14/14
Posts: 38
If I may, I have a question as well:

if a customer does not opt in to courtesy overdraft at account opening, but then the bank calls him (let's say six months down the line) and offers the service to them, does the "what you need to know" disclosure need to be presented again?

assume they did not opt in at account opening and have had an nsf or rejected transaction from an everyday debit card.

I am leaning towards the reg e process for opt in has to happen again, but i have not been able to find anything within the reg which affirms or refutes that.

any thoughts you can share?

thanks!

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#2160908 - 01/18/18 01:22 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 65795
Loc: Galveston, TX
1005.17(b)(1) includes the delivery of the proper disclosures.

1005.17(c)(2) New account holders. For accounts opened on or after July 1, 2010, the financial institution must comply with § 1005.17(b)(1) and obtain the consumer's affirmative consent before the institution assesses any fee or charge on the consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2160945 - 01/18/18 03:39 PM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
John Burnett Offline

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Registered: 10/27/00
Posts: 36678
Loc: Cape Cod
Section 1005.17 is silent on whether giving the information required on the A-9 disclosure at account opening is sufficient as a disclosure in connection with a consumer's decision 6 months later to opt in. However, since the disclosure is for the purpose of informing the consumer of what your current overdraft services are and what they cost, it's hard to argue that the consumer is informed 6 months later without a new disclosure. In my opinion the disclosure, opt-in and confirmation steps required in 1005.17 should be in that order and close in time.
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John S. Burnett
BankersOnline.com
Professional Compliance Nerd since 1976
Bankers' Threads User #8

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#2161015 - 01/19/18 10:03 AM Re: Courtesy Overdraft OPT in OPT out [Re: Lizz Jane]
rginTX Offline
Junior Member

Registered: 07/14/14
Posts: 38
Thank you, gentlemen

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