No Courtesy OD Program - Reg E Changes Applicable?

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Question:

In regards to the Reg E changes effective 7/1/2010, does the prohibition against charging fees on ATM or one time debit card transactions apply if you don't have any kind of courtesy overdraft program? For example, our bank does not authorize card transactions if there is no money in the account, however, at times checks or other transactions come in and pay out of the account before the card transaction posts, and since they have been authorized, we have to pay them. Will we be required to provide the opt-out notice?

Answer:

No, you will not be required to provide the notice (and please note that it's an opt-in, not an opt-out) or obtain the customer's opt-in if you, as a matter of policy and practice, don't authorize and pay such transactions. However, you will be prohibited from assessing any form of overdraft fee for these overdrafts via ATM or one-time debit card transactions in accounts for which you haven't obtained an opt-in.

[Note: This page was updated on 12/14/10 to reflect amendments made to the regulation.]

First published on BankersOnline.com 2/08/10