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#2257854 - 08/09/21 02:31 PM Reg E Opt-In/Out Question
Bankwoman1 Offline
Platinum Poster
Joined: Dec 2015
Posts: 745
Midwest
Ok - I have a stupid question but this came up and for some reason I am struggling with an answer. I am 1 week off of a 6 week medical leave and this could be the reason for my uncertainty!

If we offer an Overdraft Privilege program to our customer but they do not apply for an ATM or debit card - do they need to sign the Reg E opt-in/out form? My first thought was yes, because they are in the ODP program and could possibly apply for a card at a later date. But, then I thought, if they apply for the card at a later date, the account rep should be having them sign the opt-in/out form at that time.

It seems like we have always just had the customer sign the form if they were in the ODP program and had them mark they did not want to opt-in to ATM and debit card purchases if they did not apply for a card. But that just seems senseless.....

Thanks for helping me clear my foggy brain!

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#2257859 - 08/09/21 03:08 PM Re: Reg E Opt-In/Out Question Bankwoman1
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,336
Cape Cod
Let's blow that fog away ...

One of the basic tenets of disclosure rules is that, when a consumer is being asked to make a decision based on information in a disclosure, that disclosure should be provided "in close proximity in time" prior to the decision. And one of the basic requirements involved in the Reg E opt-in to OD services for ATM and one-time debit card transactions is that the consumer should not be asked to opt in to a service the consumer won't be receiving.

If the consumer doesn't obtain or request an ATM card or debit card and a card won't be issued in connection with the opening of the consumer's deposit account, you can provide the section 1005.17 disclosure as an informational piece, but if the consumer later decides to request an ATM card or debit card, the bank should start the section 1005.17 process of disclosure, provision of an opt-in method, receipt of the opt-in, and confirmation of the opt-in from step one, as if the consumer had not received the disclosure earlier.


Contrast that with a situation in which a bank delays a decision on providing OD services for ATM and one-time debit card transactions for a 30- or 60-day period, but the consumer requests the service at the time the account is opened and an ATM card or debit card is issued right after account opening (without the OD service until bank determines it will be provided).
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John S. Burnett
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#2257880 - 08/09/21 05:32 PM Re: Reg E Opt-In/Out Question Bankwoman1
Bankwoman1 Offline
Platinum Poster
Joined: Dec 2015
Posts: 745
Midwest
Thank you John! I appreciate the help. That makes total sense and I don't know why I was overthinking this so much and having such an issue...

It's going to take a few days to get my head back in the game!

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