Ok, the FDIC is here for a compliance exam. The examiner asked if we tell our ATM customers via the ATM screen when a transaction they are about to make will access their overdraft line of credit. My answer was "No. What regulation requires us to do that?" Their answer was "None, we just think it is a good idea". Has anyone else run into this? Sounds like some one is overstepping their authority. Keeping track of all the "have to do's" is enough. Are they going to start marking us on "nice to do's" too? We do send out a notice to the customer each time they access their overdraft line of credit whether its at the ATM, at the teller line, a POS transaction or through the inclearing. What happened to the customer's responsibility for his own actions?

It's likely that what you're hearing is an examiner's concept of a good idea, and probably not anything that's risen to the level of an FDIC concept of a "best business practice." If the latter status had been attained, it's likely the FDIC would have issued some kind of official comment by now.

At any rate, the comment will probably not end up in any part of your examination report. If it does, it most definitely should not make the "apparent violations" section. While the idea may have merit as a business practice, it isn't required, and there may be significant reasons (cost, technology, etc.) that your bank might decide not to adopt it.

Before you get your back up with the examiner, find out where he or she is going with this. It may be nothing more than a thought to be shared with you. If that's so, you're likely to be getting lathered up over nothing here, and copping an unnecessary attitude with the examination team.

As for your question/comment about consumers' assuming responsibility for their own actions -- I think you'll find broad agreement in the banking community. Unfortunately, it seems to be terribly out of fashion, particularly in the more Liberal regions of the country, such as that in which you and I find ourselves working.

Thanks John. Don't worry, I learned a long time ago to keep my cool with the examiners. Sorry if I sounded like I was venting. I was just looking for someone elses opinion.

One of the nice things about BOL is that we can do an occasional ***RANT ***!

Keep the faith!

Hello ,

If Right of Rescission protects consumer rights can consumer abandon his ROR in writing to save his deal? I am talking about refinance, as you know with slow underwriting times, loan can run our of time and as result - borrower will loose his rate. I know it can be abandoned in case of financial emergency, but can be rate lock expiration considered as financial emergency? If borrower does not close, he will suffer thousands of dollars loses over the years? From other side - if borrower gave up his ROR, he may save his deal and get better rate.

I would appreciate your help,

Thank you in advance!

The ROR was added to Truth in Lending to protect consumers, as you have observed. Congress decided the protection of the ROR should not be easily skirted, and thus made a "bona fide personal financial emergency" the only instance in which a consumer might waive the ROR.

If the consumer were able to decide unilaterally when a "bona fide personal financial emergency" occurred, the ROR would likely lose all of its teeth. Consumers (no disrespect meant here) are notoriously oriented toward instant gratification, speed, and convenience, often at the expense of common and financial sense. So, regulators have imposed on lenders the duty to determine whether the consumer's financial emergency is truly that, and we're fed examples of what might and what might not constitute such an emergency.

The consequences of a lender's failure to comply with the ROR requirements are onerous enough to encourage lenders to take a pretty hard line on this issue. As you have pointed out, the definition of a personal financial emergency is often ambiguous. And we are likely to suffer with that ambiguity for as long as the ROR is a matter of law.