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#2218810 - 07/31/19 12:40 PM Overdraft Privilege Opt-In/Out
Bankwoman1 Offline
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Joined: Dec 2015
Posts: 1,046
Midwest
We currently offer an OD Privilege product on 5 of our checking accounts. We do not require our customers to opt in or out of this program, they simply are a part of these accounts. We do, however, go over the program with the customer and provide a disclosure, and if they choose not to have the OD Privilege on their account, then we fill out a maintenance form and have the customer sign it. We do have them opt in or out of one time debit card purchases and ATM withdraws. We recently attended an OD webinar and the instructor mentioned that she thought it was a good idea to have the customer opt in or out of the OD program just like we do for debit card transactions & ATM transactions. Should we have a separate document that the customer signs stating they want to be in the OD Privilege program? Or are we ok with leaving it the way we are doing it and removing it if the customer requests us to do so? What do some of your FI's do?

Thanks!

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General Discussion
#2219264 - 08/07/19 01:50 PM Re: Overdraft Privilege Opt-In/Out Bankwoman1
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Consumer accounts should not be offered with OD service for card-related transactions activated by default unless you don't charge a fee for the service. The FDIC's OD guidance suggests that you consider making OD service of any kind be an opt-in for consumers.
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#2222494 - 09/27/19 04:23 PM Re: Overdraft Privilege Opt-In/Out Bankwoman1
Deputy Dawn Offline
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Deputy Dawn
Joined: Feb 2007
Posts: 485
Pennsylvania
For all new accounts that are eligible for Overdraft - we have a form with 3 choices that the customer selects and signs

Overdraft for checks & ACH only
Overdraft for checks, ACH and debit card transactions
No Overdraft

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#2222750 - 10/01/19 06:42 PM Re: Overdraft Privilege Opt-In/Out Deputy Dawn
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Originally Posted by Deputy Dawn
For all new accounts that are eligible for Overdraft - we have a form with 3 choices that the customer selects and signs

Overdraft for checks & ACH only
Overdraft for checks, ACH and debit card transactions
No Overdraft


Are we to assume that "debit card transactions" comprises both ATM and purchase activity?
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#2223119 - 10/04/19 09:01 PM Re: Overdraft Privilege Opt-In/Out John Burnett
Deputy Dawn Offline
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Deputy Dawn
Joined: Feb 2007
Posts: 485
Pennsylvania
We do not allow withdraws from the ATM without a sufficient balance

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#2223221 - 10/07/19 08:10 PM Re: Overdraft Privilege Opt-In/Out Bankwoman1
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Assume I had an account with your bank, DD, with a debit card and opted in to overdraft coverage for checks, ACH and debit card transactions. What would happen if my ledger balance is $100, I have no memo posted items pending, and I try to pay for $180 in groceries at Target with my debit card? Will that transaction be approved based on the fact I have opted into coverage for debit card transactions?
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#2223836 - 10/16/19 07:52 PM Re: Overdraft Privilege Opt-In/Out John Burnett
Deputy Dawn Offline
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Deputy Dawn
Joined: Feb 2007
Posts: 485
Pennsylvania
Yes, since you had opted in, the POS transaction would be approved and we would charge a fee

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#2223837 - 10/16/19 07:56 PM Re: Overdraft Privilege Opt-In/Out Bankwoman1
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
I trust you know my point in asking that question. In order to solicit opt-ins for OD service for ATM and one-time POS transactions, you have to actually provide the service; i.e., you have to authorize card-related transactions that would overdraw the consumer's account.
Last edited by John Burnett; 10/16/19 07:56 PM.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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