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#1405418 - 06/18/10 01:45 PM OD Fees until 8/14/10 - No Opt-ins mailed?
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
Our Bank has never paid debit card transactions if there were insufficient funds in the account at the time of authorization. The only time this actually happened is when intervening items posted prior to final settlement. We used to charge for those overdrafts, but we will not be going forward.

My question is this, can we continue to charge our existing customer accounts (had accounts prior to 7/1) until 8/15, or do we have to cease doing so as of 7/1 since we are not going through with the opt-in process?

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#1405427 - 06/18/10 01:59 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? AuditorK
John Burnett Offline
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John Burnett
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Posts: 40,086
Cape Cod
You can wait. You won't be able to assess such fees on or after 8/15/10 [ยง205.17(c)(1)].

If the transaction takes place or posts prior to 8/15, you cannot assess an OD fee for that transaction on or after 8/15.
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#1406051 - 06/21/10 03:08 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? John Burnett
AuditorK Offline
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Posts: 962
PA
Thanks John. That gives us a little extended window before we have to give us these fees.

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#1406111 - 06/21/10 04:13 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? AuditorK
BlueJ Offline
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Joined: Apr 2009
Posts: 31
Is this the case for a continuous overdraft fee too? If the transaction posts before 8/15, and the customer has not opted in, can you charge a continuous OD fee?

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#1406115 - 06/21/10 04:18 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? BlueJ
#Just Jay Offline
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Cheeseheadland
AuditorK: be careful of accounts opened between July 1 and August 15 though... will you have the ability to not charge them while you charge your other accounts? Since it would be difficult to do so with our core, our switch is flipping on July 1.
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#1406147 - 06/21/10 04:57 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? BlueJ
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Originally Posted By: BlueJ
Is this the case for a continuous overdraft fee too? If the transaction posts before 8/15, and the customer has not opted in, can you charge a continuous OD fee?


The prohibition against assessing an overdraft fee of any kind extends to continuous overdraft fees if the triggering transaction is an ATM or one-time debit card transaction that overdrew the account, regardless of when the transaction posted. For example, if the transaction hit the account on August 11 and your continuous OD fee kicks in if the overdraft isn't cured by the fifth business day, you would not be able to assess a continuing overdraft fee if the only reason for the OD balance is the ATM or one-time debit card transaction, because the fifth business day would be after the 8/15/10 deadline.

If the OD balance consists in part of an ATM or debit card transaction or transactions and in part on a check, ACH or other transaction that overdrew the account, you can assess a continuing overdraft fee, but count the elapsed days from the date of the ACH or check transaction, not from the date of the ATM or debit-card transaction (see Comment 17(b)-9 to Regulation E).
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#1406210 - 06/21/10 06:33 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? #Just Jay
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
We will have to manually charge for debit/ATM overdrafts since our core system will not be charging for any after 7/1. This will be a part of the daily pay/return decisions made by management.

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#1406312 - 06/21/10 08:18 PM Re: OD Fees until 8/14/10 - No Opt-ins mailed? John Burnett
smith Offline
Member
Joined: Jun 2004
Posts: 69
Nebraska
Originally Posted By: John Burnett

If the OD balance consists in part of an ATM or debit card transaction or transactions and in part on a check, ACH or other transaction that overdrew the account, you can assess a continuing overdraft fee, but count the elapsed days from the date of the ACH or check transaction, not from the date of the ATM or debit-card transaction (see Comment 17(b)-9 to Regulation E).


John - without transition rules in the regulation, could we argue that the total overdraft amount held by a customer on 8/14 could be treated as transactions prior to the regulation going into effect for existing customers and could use that amount to charge continuous OD fees? In other words, treat any OD balance that crosses over to 8/15 like overdrawn check transactions?

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