We are acquiring a bank that did not offer their customers an overdraft service, in other words they did not pay overdrafts so their customers were never assessed an overdraft fee. We will allow overdrafts as we do with our current accounts, and they will be assessed a fee for that. Is this something that should be disclosed to the acquired customers 30 days in advance? It has proven to be difficult to weed through requirements and exceptions to M&A situations.

If they never paid anyone into an overdraft - you mean they did not disclose an overdraft fee?

An overdraft and returned item fee are two different animals.

They did assess return item fees, since they did not have an overdraft program.

Then you are going to have to follow the change of terms process in Regulation DD to establish an overdraft fee.

And, if you want to include ATM and one-time debit card transactions in the list of transactions that can trigger an OD Fee, you'll have to go through the four-step process for soliciting consumer opt-ins to that part of your OD service.

Our bank that we are looking has an ad hoc program, and after digging in we determined that they pay and return items, however they only disclosed an "NSF Fee" on their fee schedule. On their statement they show either "NSF fee - item paid" or "NSF fee - item returned" and properly table the fees on the statement. Will a Reg DD change in terms notice establishing a "NSF Return Item fee" and an "Overdraft Paid item fee" at legal date fix this? Should any other corrective action be done?

Yes. And in case anyone's wondering why a "fix" is needed, an overdraft fee should always be called an overdraft fee because you have to use the phrase "Total Overdraft Fees" in the table at the end of the activity portion of the periodic statement if the consumer has incurred any such fees during the statement period or year-to-date. And, Reg DD calls for uniformity in naming fees and costs. If you use "overdraft fee" in the table, you have to use "overdraft fee" in the statement proper, in your disclosures and, if referenced, in advertising.