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Authorized Signers and Reg. E Opt-in Requirements

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Concerning Reg. E and opt-in, should authorized signers, rather than an account owner, on an account be allowed to make the opt-in decision?

Only the account owner or owners have the right to opt into an overdraft service for card transactions. A bank accepting an opt-in from an authorized signer would do so at its peril, since he or she doesn't have any right to change the terms of service for the account, or to agree to have the account subjected to fees. A bank should not accept a revocation of an opt-in from an individual who is not an account owner, either.

There might be a reason to make an exception in the case of an account opened and managed exclusively by an attorney-in-fact for his/her principal, as might be the case when an account is opened for an incapacitated individual such as an aged parent. Even there, I would tread very carefully.

First published on 5/03/10

First published on 05/03/2010

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