We currently offer one of the dreaded OD protection services. When we rolled it out, we allowed it to be accessed by the ATM. For example, if a customer came to the ATM to withdraw $100 and only had $80, it would cover that overdraft of $20 (with appropriate fees assessed of course). We have since realized that this is not a good thing and want to remove it. Are we required under Reg DD to disclose this in advance? Keeping in mind that the OD service can be canceled at any time without notification.

Thanks in advance and Happy Friday!

If this is a benefit of your consumer accounts that you disclosed in your account TISAs, I think you have to give advance notice of your change.

If this is a separate service governed solely by a separate ODP agreement, the terms in your ODP agreement should govern whether advance notice is required.

I agree with Brenda. The features of ODP were not required to be in your Regulation DD disclosure. If you put them there and now intend to alter them, advance notice would be prudent. The argument would be that you voluntarily made them part of your contract.

If you did not include the features with Regulation DD disclosures, review your prior customer communications concerning ODP. My experience is they can say anything. If you think the way it was explained needs to be altered to assure their understanding, then I would tell them about the change in the same fashion I told them about the program to begin with.

In our disclosures, we talk about how the service works, but not that far into inner workings regarding accessibility from an ATM. Our introductory letter did mention that capability, though. I'm of the opinion that we should give the advance notice, but am trying to justify not having to do that. Help?

Why are you wanting to withdraw the privilege of accessing the ODP from the ATM? We are in the advanced stages of reviewing two companies to implement this type of product and whether or not to transmit it to the ATMS is one area we are looking at.

We are also "going live" with an ODP program in late March. We've been discussing allowing customers to overdraw at the ATMs and I'd like to hear the arguement against it - especially any problems it has caused your bank. Do you notify customers when they overdraw at the ATM and inform them that the fee is being charged? Also if someone cashes a check at the teller line that overdraws their account, do the tellers let them know they are overdrawing their account and that they will be charged?

If the ATM card is also a debit card, then the avaialable balance sent to the servicer could be a problem. If the transmitted balance includes the OD line, the following may happen:
1. Cust w/d from ATM, transfer accesses the OD line
2. Cust uses debit card at store and again accesses OD line
3. Checks and ATM w/d post to account---good so far
4. Debit card transaction hits acct. OOPS, no more money, no funds available on line.

Sending the balance to the servicer with the OD line may not be a problem if the card is only an ATM card (since these transactions generally post the same day) the bigger problem is the delay in posting of debit card items.

You may also want to check on how fast "other" ATM items post. For example, a lot of gas stations take the ATM card, but I am not sure if there is a delay in posting or not.

The Indiana DFI specifically analyzed ATM withdrawals vs. bounced checks in their fall 2002 newsletter. The link previously posted by dpersfull is inoperative, but you can get there from http://www.in.gov/dfi/

Their analysis is obviously based on Indiana law, but some of the key issues are generic.

The issue came up when a customer went to an ATM to withdraw $20. They didn't have $20 available so it went into the Overdraft Honor part of the account. They were service charged $25 for the overdraft. Not surprisingly, the customer came back and wanted to know why they were being charged $25 for a $20 withdrawal. The ATM doesn't have the capability of telling the customer that they are into their ODH, but they are told this at the teller line, so they have the choice. Big headache!

Tell the customer that they are not being charged for a $20 withdrawal, they are being charged for overdrawing their account, which they should have known they were doing to begin with.

While that statement is true, the customer would have none of it. Thus, removing ODH from ATM access.

At one time, we had the OD LOC tied to the customer's ATM/Debit card balance. MOST customers hated it, a few liked it, so we changed the way we calculate the balance that we submit to the network to be the same as "regular" book balance. This also more closely resembles what the customer expects their checking account balance to be.

BTW, those that liked it, were the same ones that we have the most problems with and eventually have to run off.

PS How many days left on baby countdown?

How many days left on baby countdown? = 6 weeks, 5 days.

we don't provide a balance that they will be OD when they write a check, so why tell them at an ATM
and we cannot tell them when the debit card is used at a merchant. what is the difference

the regulators may not agree but the customer is responsible for the balance in their account and if the transactions takes them into OD and we charge a fee for that why penalize the bank with more regulations

people today want to blame everyone else and not take responsibility for their own actions. and we are looked at as protectors not a business

In reply to:

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people today want to blame everyone else and not take responsibility for their own actions. and we are looked at as protectors not a business

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That's how we get new regulations. Keeps compliance officers working and their (future) kids in diapers.