Answer by Patricia Cashman:The model clauses have not yet been updated to include the notices required by Reg. DD, section 230.11(b). You are only required to make these disclosures when you advertise the OD program. Unless your tellers are actively soliciting that type of product, you would not need a disclosure at the teller window. If you have ODP brochures at the teller windows, the brochures themselves should have the required disclosures. ODP advertisements on the ATM screen do trigger some of the required information. However, you need only 230.11(b)(i) & (iii).
You can follow the disclosure requirements fairly easily:
- Requirement - (i) The fee or fees for the payment of each overdraft (ABC Bank assesses a fee of $30 for each item resulting in an overdraft);
- Requirement - (ii) The categories of transactions for which a fee for paying an overdraft may be imposed (A fee may be imposed for covering overdrafts created by check, in-person withdrawal, ATM withdrawal, or other electronic means);
- Requirement - (iii) The time period by which the consumer must repay or cover any overdraft (Your account must be returned to good standing within 3 business days);
- Requirement - (iv) The circumstances under which the institution will not pay an overdraft (ABC will not pay an overdraft if you have not returned your account to good standing within 3 business days).
Sections 230.6(a) and 230.11(a)(i) state that you must differentiate between the fees charged for returning items as unpaid and those for paying into the overdraft. This should have been in place. Contact your vendor immediately to have this corrected. This is a new "hot button" with the regulators.
Answer by John Burnett:The ATM notices you ask about may not be required by Reg DD in any event. If you are asking about a notice at the ATM that alerts the user that a requested transaction will/may trigger an overdraft fee, that notice is one of the "best practices" recommended in the February 2005 Joint Guidance on Overdraft Protection Programs. There was no "blessed" wording included for such a notice in the Guidance document. There was, however, an alternative suggestion if you are unable to provide a transaction-specific notice. The Joint Guidance suggests the posting of a notice that "transactions may be approved that overdraw the account and fees may be incurred." The connection to Reg DD is that the provision of either notice (transaction-specific or generic) is specifically excluded from the long list of actions that might trigger disclosures under sections 230.11(a) or (b).
First published on BankersOnline.com 2/26/07