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Request to Reinstate VISA Debit Card (Overdraft)

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Our Bank is considering using a "Request to Reinstate VISA Debit card and Account Overdraft Agreement" for customers continually overdrafting their account with their Debit Card. What are some of the compliance issues we may face?

Reg E states that a consumer's opt-in for overdrawing their account with an ATM/Debit card is valid until the consumer revokes the opt-in or the bank terminates the service. Based on having a customer request to be reinstated it appears that the service was previously terminated for that customer. Make sure you provide a current A-9 form disclosure and that your agreement complies with the disclosure requirements in Section 1005.17 of Reg E. You must also treat customers who have not opted-in for ATM/Debit Card overdrafts the same as those who have, which includes under what circumstances the coverage is terminated or reinstated. If you hold these individuals to different standards, you will violate 1005.17(b)(3), which requires the same terms for each class of customer. Finally, there is the concern of discrimination as to which cards you are willing to reinstate. Make sure you have specific procedures in place so that you can demonstrate that you are not discriminating against a protected class when making decisions regarding reactivating cards.

First published on 5/7/12

First published on 05/07/2012

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Filed under compliance as: 

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