Answer:
The wording of the regulation can readily lead you to assume that an overdraft fee would be permitted in such a situation, and in other scenarios, too. However, I have spoken with Counsel at the Federal Reserve Board's Division of Consumer and Community Affairs, and he has told me that it was not the intent of the Fed's Board that a fee should be permitted in such cases. In fact, he said that the Fed's staff is working on language needed to clearly state the Board's intent that an OD fee would not be permitted, and he admitted that the current wording is at best ambiguous on the question. We will have to see what the Fed does to clarify this apparent conflict of the language of the regulation with the intent of the Board.
[Comment: Since this page was published, the Federal Reserve System did, indeed, clarify the language. In fact the "exceptions" subsection 205.17(b)(4) was removed entirely. There simply is no exception to the requirement that you not impose an overdraft fee for an ATM or one-time debit card transaction that overdraws a consumer account unless you have complied with Section 205.17(b)(1) by making the required disclosures, obtaining the opt-in, and confirming the opt-in in writing (or electronically).]
First published on BankersOnline.com 1/11/10
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