Three Reg E Overdraft Webinar Questions

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Question:

Reg E overdraft questions from the January 6, 2010 webinar:<ul><li>Does the reg allow you to offer the option of opting in to ATMs or to debit cards in addition to both? <li>For existing clients, can the confirmation be sent at the same time as the written notice, maybe with a tear-off section with the revocation information that the customer would keep? <li>It talks about the telephone being an acceptable method to obtain the opt-in. How would this work through a call center? Would the call be sufficient or would a written notice have to be mailed and received before taking any action from a called in request?</ul>

Answer:

There's nothing in the regulation providing for a split opt-in (yes to POS and no to ATM or vice versa). There's also nothing there to prevent it. If your institution can manage them separately (the opt-ins and the management of the transaction authorizations and overdraft fees), offering one or the other or both would appear to provide consumers with even more choice than the regulation requires, and should be acceptable. However, it would require a very flexible system in my estimation, and the ability to discern between PIN and signature POS authorization requests on the one hand and ATM requests on the other.

The confirmation could be a customer-retained copy of the written notice if it included the required information about revocation.

As for a telephone opt-in, it would only be valid if the bank had first delivered the opt-in rights notification. If the consumer found out about opt-ins in an early July newspaper article and your institution had not yet delivered its notices to customers on your books as of 7/1/2010, you'd have to ensure the customer is delivered the notice before accepting the opt-in. If the customer was calling to inform you he or she wished not to opt in, you should be able to implement that choice then, and not wait until August 15.

First published on BankersOnline.com 2/01/10