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#2222826 - 10/02/19 02:06 PM Reg E Opt-In and Continuous Overdraft Fee
TeamComply Offline
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If an account is overdrawn due to a recurring debit card item and the account is NOT opted-in (so customer has opted-out), we could charge a continuous overdraft fee, correct? We typically charge a continuous OD fee when an account is overdrawn for 10 consecutive business days.

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#2222839 - 10/02/19 03:28 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
John Burnett Offline
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The special opt-in requirement for imposing overdraft fees under ยง1005.17 of Regulation E doesn't apply to recurring debit card items. Assuming that you accurately disclosed the opt-in for ATM and one-time debit card transactions, you can impose a correctly-disclosed "continuous OD fee."
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#2222869 - 10/02/19 05:58 PM Re: Reg E Opt-In and Continuous Overdraft Fee John Burnett
TeamComply Offline
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Thanks John. So recurring transactions are subject to a fee (be it an overdraft fee or continuous overdraft fee, or both) whether or not the account is opted-in under Reg. E...is that correct?

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#2222874 - 10/02/19 06:14 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
Adam Witmer Offline
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They could be subject to a fee if you disclosed it properly, but aren't subject to Regulation E as Reg E only covers ATM and one-time debit transactions.
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#2222880 - 10/02/19 06:29 PM Re: Reg E Opt-In and Continuous Overdraft Fee Adam Witmer
TeamComply Offline
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Thanks for the response. Where are banks expected to disclose this information about continuous OD fees?

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#2222886 - 10/02/19 07:00 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
BrianC Offline
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Continuous overdraft fees must be disclosed as part of your Truth in Savings disclosure the same as all other fees charged in connection with the account.
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#2225268 - 11/07/19 05:39 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
CountryBanker Offline
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Would you consider the fee disclosed if it did not specifically appear on the initial TIS Disclosure, but does appear on the bank's Fee Schedule, and the verbiage "refer to the separate Fee Schedule provided to you with this disclosure" appears on the initial TIS disclosure to tie them together?
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#2225291 - 11/07/19 08:25 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
BrianC Offline
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Illinois
Reg DD does not mandate the format of the disclosures, only the content and that they meet the "clear and conspicuous standard." As an auditor, I would be spot checking staff to ensure that both documents are provided consistently at account opening or in response to requests for account information to ensure compliance.

The format itself is fine, provided that both documents are provided to the consumer at the same time.
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#2225314 - 11/08/19 12:21 PM Re: Reg E Opt-In and Continuous Overdraft Fee TeamComply
Adam Witmer Offline
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To add to what Brian said, the reason it is okay to have your fees on a separate fee disclosure is that 1030.3(a) (and specifically comment 1-ii) permit disclosures to be made "in combination with other disclosures or account terms." As an auditor, I've seen quite a few smaller financial institutions take a similar approach with having fees listed on a separate fee schedule (like a lobby brochure). As long as customers are, in fact, receiving the fee disclosure with the TISA, then you should be fine.
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Adam Witmer, CRCM

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