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.

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.

Thank you!

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.

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.)

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.

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.

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.

"You can opt-in when we offer it. If we offer it to you again, you can opt-in then."

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.

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.

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!

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.

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.

Thank you, gentlemen