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#2200582 - 12/13/18 02:57 PM Transfer/Withdrawal that will pull from Overdraft
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
Is there a rule or best practice that indicates that if, for example, an ATM withdrawal would access an Overdraft limit associated with the account, the customer be notified and allowed to cancel the transaction (not the rule for disclosure of additional balance)?

If so, could you please provide the reference.

Thanks in advance.
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#2200585 - 12/13/18 03:22 PM Re: Transfer/Withdrawal that will pull from Overdraft Likes to Comply
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,325
Illinois
Two comments on this. One: the 2005 Joint Agency Guidance on Overdraft addresses this.

https://www.federalreserve.gov/boarddocs/SRLETTERS/2005/SR0503a1.pdf

Alert consumers before a transaction triggers any fees. When consumers attempt to withdraw or transfer funds made available through an overdraft protection program, provide a specific consumer notice, where feasible, that completing the withdrawal may trigger the overdraft fees (for example, it presently may be feasible at a branch teller window). This notice should be presented in a manner that permits consumers to cancel the attempted withdrawal or transfer after receiving the notice. If this is not feasible, then post notices (e.g., on proprietary ATMs) explaining that transactions may be approved that overdraw the account and fees may be incurred. Institutions should consider making access to the overdraft protection program unavailable through means other than check transactions, if feasible.

On September 11, 2018, the agencies issued a joint statement noting that guidance does not have the effect of law.

https://www.consumerfinance.gov/about-us...isory-guidance/

When determining the best course of action for signage and programming of your ATMs, consider both of the above.
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#2200586 - 12/13/18 03:27 PM Re: Transfer/Withdrawal that will pull from Overdraft Likes to Comply
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,651
Galveston, TX
Likes to Comply - Are you referring to an Overdraft Protection Program limit or an actual line of credit?
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#2200587 - 12/13/18 03:40 PM Re: Transfer/Withdrawal that will pull from Overdraft Likes to Comply
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
Just found it too - 2005 Joint Agency guidance. Program not a LOC.

Thanks!!!
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#2200821 - 12/14/18 09:19 PM Re: Transfer/Withdrawal that will pull from Overdraft Likes to Comply
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,700
Cape Cod
The text that Brian shared with us is from the "best practices" portion of that Guidance. It's clearly easier to do at a proprietary ATM than a network machine (where it might not even be possible). A lot of banks have put up notices to the effect that "Withdrawals from your account may overdraw your balance, and trigger an overdraft fee." Sometimes those notices are vandalized. As Brian noted, it's guidance, not a regulation. But it is guidance issued by all four prudential regulators.
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