Provisions for civil penalites were removed from the Truth in Savings Act several years after it became law. Accordingly, your regulatory agency is the sole source of enforcement and, frankly, Reg DD has never been a focal point for regulatory attention. However, given the regulatory hatred of ODP programs, it is likely that greater attention will be paid to Reg DD enforcement. Since the ODP regulations are primarily about disclosure, I would suggest that the simplest thing they could do with errant banks is force them to redislcose. Imagine having to provide corrected periodic statements for all of your affected customers for the period of time it took your bank to get in compliance after July 1, 2006.
First published on BankersOnline.com 9/04/06
Ramifications of Reg DD ODP Non-compliance
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Question:
My recent return to banking, in particular compliance, has been welcomed by changes in the last 3.5 years. The ODP changes are the first hurdle at my bank, as they originally believed the changes did not affect them. My understanding is if their practice has been to charge an NSF fee regardless of pay or return, this is no longer appropriate to only indicate on the statement NSF fees. Paying an NSF actually creates an overdraft, and the fee should be clearly described as such. Obviously, if I'm right, our forms companies should be happy as we will be working behind the curve to get in compliance with the new amendment. Also outside of regulators writing us up, what are the possible ramifications of not being in compliance by 7/1/06?
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