ABA conducted a survey of 300+ banks, asking who "promotes" OD protection product. 55% indicated that they do not promote it.

I passed this along to management thinking that they might decide to discontinue "promoting" the feature in order to avoid the new disclosure requirements.

Instead, they are becoming increasingly insistent that we don't "promote" the feature. However, we have a brochure which we provide to the customer that indicates how and when they will qualify, the various "line" amounts based upon the type of account, how transactions are posted.

We send the customer an activation letter, which also reiterates the "line" amount and includes an enclosed brochure.

Now, does anyone out there think that we are not "promoting", per the new Reg DD amendments?(I'm not looking for regulatory citations, just some gut reactions) Thanks

My gut reaction is that your bank is not promoting ODP. Sounds like you are doing the minimum necessary to give the customer the details of the program. If you are going to continue to offer the product, don't you have to disclose that information in some way?

In my mind, promoting it would be saying things like "don't worry if you make an error in your checkbook, you have peace of mind with ODP" etc.

Oops - I don't know how I posted the same thing twice.

Sorry. But almost anything you send out about your ODP will be considered a promotion of the program, beginning 7/1/06. Communicating the overdraft protection amount in any way to the customer will constitute promotion. Your brochure, since it describes your bank's program, is also promotion. The definition of "advertisement" in Regulation DD will expand greatly as of July of next year.

Ken Golliher and I are discussing ODP programs, the February guidelines and the amendments to Regulation DD in our June 20 Webinar. http://www.bollearningconnect.com/odp0605/

From the summary of the rule: "An institution also is not promoting overdraft services by providing legally required disclosures, by discussing in a deposit account agreement the institution’s right to pay overdrafts, or by providing educational materials that do not specifically describe the institution’s overdraft service..."

Wouldn't the things upstate describes fall under the safe harbors? I'm just curious b/c we do the same 2 things as Upstate (insert in new account packet and an activation letter) and I was thinking of those items as required disclosures, not advertising or promotion.

I think the issue is that Upstate said: "we have a brochure which we provide to the customer that indicates how and when they will qualify, the various "line" amounts based upon the type of account....".

The regulation is referring to the standard boilerplate type stuff that we have always had in our agreements, i.e., may pay totally at our discretion, no legal requirement, doing it once doesn't mean we will do it again, etc., etc.

IMHO - Any mention of the fact that there are specific limits and under what circumstance you may pay an overdraft is crossing the line.

IMHO it sounds like it is definitely a promotion. If you read the final rule they are very clear that telling the customer the amount of their "line" is promoting the service.