We offer ODP to our consumer customers if their account is in good standing 90 days after account opening. We obtain Reg E Opt In for debit card transactions at account opening. I would like to know how other banks are handling the fees/codes since there is no ODP coverage for the first 90 days. It's possible that a customer could overdraft their account with a debit card before ODP is given if the transaction took place during the small window of evening update when the system is down. Is it a violation to assess a charge since there is no ODP yet but the customer opted in to allow debit card transactions?

Also, what if the customer later opts out of ODP or has the service revoked? We do approve overdrafts on an ad hoc basis sometimes if the customer does not have ODP, but there is no such approval for debit cards because 90% of the time the transaction will simply be declined automatically if the customer does not have ODP or an overdraft line of credit.

Should we go in and manually "opt out" these customers for Reg E purposes in the event the ODP service is declined or revoked?

If there is no overdraft protection, there is nothing to opt-in to.

(b) Opt-in requirement. (1) General. Except as provided under paragraph (c) of this section, a financial institution holding a consumer's account shall not assess a fee or charge on a consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, unless the institution:

(i) Provides the consumer with a notice in writing, or if the consumer agrees, electronically, segregated from all other information, describing the institution's overdraft service

This piece of the reg was introduced to prevent banks from unfairly assessing ODs on debit card transactions. It is intended to help your customer become more aware of your OD services, fees, etc, and allows him/her to affirmatively opt-in to those services for one time debit and ATM transactions. Without a standard OD plan in place (ad-hoc not included) there is nothing to opt-in to.

We have a similar situation to OD services. A new account isn't eligible for our standard protection for 90 days. We do provide the customer with the opt-in and if signed, he/she receives OD coverage for half the normal amount; but it's all-inclusive...checks, ACH, and debit card transactions are included in this coverage. If, at any time, we revoke OD services, the opt-in is automatically revoked as well.