When lowering the de minimis amount on checking accounts that qualify for overdraft privilege, do you notify your customers?

This is not something that is disclosed when the account is opened.
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T.S.

You mean you are going to start charging a $29 overdraft fee on an overdraft of $5 instead of one for $10?

Correct.

Right now we charge $25 on items over $50, but we want to change this to charge $25 but on items over $25.

So how do you satisfy the requirement of 1030.4(a)(4)?

(4) Fees. The amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed.

Even if you make the argument that your disclosures say you charge a fee regardless of amount and then as a courtesy impose a de minimus, changing how fees are charged (particularly for customers who have figured out what the de minimus is) increases UDAP risk.

Well, there is no requirement for a de minimis limit be disclosed. If you have however disclosed it via any manner in the past, I would highly recommend that you notify your account holders of the change. You still will need to weigh the reputational risk and potential unfair and deceptive practice from the regulators for charging $25 on an overdraft of $25.01. It is sort of a bar that is going to be difficult to justify the need to lower it unless you are experiencing a lot of losses by those transactions for $25-$50.

We disclose the OD fee and the maximum OD fees a day. What is not disclosed is the de minimis amount.

As Randy notes, there is no requirement to disclose the de minimis but be sure to weigh the UDAP risk.

The thread has been edited to change "de minimus" to "de minimis."

Reviving this thread. We are looking at our overdraft and NSF charges. We do not have an opt in program for debit card/ATM and do not charge on those transactions. As of now, we have a de minimis of $10 and our fee is $29. We are considering moving that de minimis to $29. Are others increasing that de minimis level, and/or getting rid of these fees in anticipation of regulatory scrutiny? If you don't mind, list your regulator. Ours is FRB and they have not issued any statements (publically) on the topic as far as I am aware of.

All OD fees are on a short leash and would expect to see them all go away shortly. To many banks are doing it and it is going to put you are a distinct competitive disadvantage. Making this sort of tweak is likely to be very short lived.

Both OD and NSF fees are on the most recent CFPB rulemaking agenda.