Does Reg E Opt In/Out Apply to Directors?

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Question:

Does the Reg E opt in/out requirement apply to Directors? If an institution is required to charge Directors for overdrafts as part of the Reg O requirement, would this prohibit them from opting out for Reg E purposes?

Answer:

Directors have household accounts, and they are subject to Regulation E just like other consumers accounts. If a director has not opted in to overdraft service for ATM and one time debit card transactions, Regulation E prohibits the bank from assessing an OD fee if an overdraft is created by such a transaction that "sneaks" in under the radar. Since no fee would be assessed under similar circumstances not involving an insider, the fact that the director isn't charged creates no Regulation E violation.

First published on BankersOnline.com 4/23/12