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Date of Opt-in Fee Waiver

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Question: 
We've heard conflicting reports from the many webinars we've attended regarding Reg E. If we send out opt-in forms on May 1, do we have to begin waiving fees at that time, or can we give our customers the 8/15/10 effective date and begin waiving then?
Answer: 

If you send out your opt-in notices, be very certain that your operations and systems procedures for managing overdraft services covering card transactions are ready and operational first. When your customer receives your opt-in disclosure, in which you have informed him that you will stop authorizing and paying ATM and everyday debit card transactions that would overdraw the account beginning 8/15/10, if you have not received an opt-in, your customer can do one of three things:

  1. Nothing. In this case, you can continue providing overdraft service for card and everyday debit card transactions through 8/14/10. On 8/15, you would have to stop providing the service for card transactions (and only for card transactions), or continue authorizing and paying card transactions, but stop assessing any overdraft fees for them.

  2. Provide an opt-in. In this case, you can continue providing overdraft service for card transactions for the account, through and beyond the 8/15 date, and until the consumer revokes the opt-in.

  3. Contact you to tell you that he or she does not want your overdraft service. In this case, you must be prepared to stop providing the overdraft service for card transactions, or stop assessing fees for card overdrafts in any event promptly, without waiting for the 8/15/10 date. This is the reason you need to have your procedures ready before sending out the opt-in disclosures.



First published on BankersOnline.com 3/01/10

First published on 03/01/2010

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