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#1370605 - 04/07/10 05:17 PM Sending out the Opt In notice early
Compliance101 Offline
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Compliance101
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Tennessee
We are planning on sending existing customers an opt in notice and obtaining one from the new customers earlier than the effective date of the regulation. Is this ok? What are other banks doing?
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#1370614 - 04/07/10 05:22 PM Re: Sending out the Opt In notice early Compliance101
Skittles Offline
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TN
It is acceptable as long as you have the ability to comply with the regulation. If the customer decides not to opt-in your institution must follow the Reg E requirements early - no fees for one-time debit card transactions that cause overdrafts. We will not be doing this until June.
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#1370620 - 04/07/10 05:32 PM Re: Sending out the Opt In notice early Skittles
Compliance101 Offline
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Compliance101
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Tennessee
Ok, if we do send out the notices early and explain it will not take effect untill the effective date of the regulation, will this suffice for us to comply on the effective date instead of earlier?
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#1370891 - 04/07/10 08:45 PM Re: Sending out the Opt In notice early Compliance101
John Burnett Offline
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Cape Cod
Some "sources" have apparently said so. I can't see where they have the blessing of the Fed for that belief. And the Fed said that it is the FRB Board's "expectation" that banks would turn off fees promptly if they receive what amounts to an "opt-out" from a consumer in response to the delivery of opt-in notices.
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#1371841 - 04/09/10 03:27 PM Re: Sending out the Opt In notice early John Burnett
Elwood P. Dowd Offline
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Agree with John; "Heard it, but ain't seen it."

Leaving the opt-out box on the A-9 creates a likelihood of an opt-out response. If a customer attempts to opt-out prior to the effective date you plugged into your A-9, you need to facilitate it.
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#1372552 - 04/12/10 02:47 PM Re: Sending out the Opt In notice early Elwood P. Dowd
lblu Offline
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Based on the 2/26/10 ABA analysis of this question, it appears that their opinion is that we can begin to Opt-in customers early as long as it is very clear that the service and choice will not be effective until the designated dates. "... the Supplementary Information states that if a notice is sent early and the customer responds by declining the service, the Federal Reserve Board staff would ―expect a bank to honor that choice not to opt-in. While we do not believe such a gratuitous statement that was not actually incorporated into the regulation or commentary requires such a customer response to be immediately implemented before the regulatory deadlines and requirements in the rule, it may open the door to litigation risk". "Banks that choose to send notices before they are operationally ready to permit customers to opt out should state clearly in the notice and consent form (and the written confirmation), the date when the choice will be effective."
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#1372567 - 04/12/10 03:05 PM Re: Sending out the Opt In notice early lblu
Elwood P. Dowd Offline
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By "ain't seen it," I meant from the Fed. wink I've read lots of things elsewhere, but the Fed's is the opinion that matters.

The risk entailed by ignoring a clear statement in the supplementary information is more likely to be described as "regulatory risk" not "litigation risk."
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