Opt In/Out-Overdraft Fee for Card Transaction

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Question:

Regarding the following question I read today, would it be okay for a bank to charge the overdraft fee if the customer HAD opted in - even though the account had a positive balance when the transaction was approved? Or, does this fall in line with the UDAP statement from the agencies? Question: Can we charge an overdraft fee for a one-time debit card transaction that overdraws an account of a customer who has not opted-in if there were sufficient funds at the time of authorization but not at the time the transaction posts? Answer: No. The rule does not include any exceptions for card transactions that overdraw an account. The rule at its simplest is, "No opt-in, no overdraft fee."

Answer:

Yes, it would be acceptable if the consumer had opted in to overdraft service for ATM and one-time debit card transactions, but your description of your overdraft program should make it clear that, because debit-card transactions are often posted to the account one to a few days after they occur, a transaction authorized against a sufficient ledger balance may result in a negative ledger balance (overdraft) when it finally posts if intervening transactions have reduced the balance.

I can't offer the same assurance if the bank authorizes against the available balance and determines positive or overdraft status based on available balance. The regulators expressed discomfort with that.