Revising Fee Schedule to Reflect Regulation E Overdraft Opt In Rules

Compliance > Deposit Operations > Overdraft
Q:  Is a financial institution required to revise the language on its fee schedule now that it is no longer allowed to charge an overdraft fee on ATM and one-time debit card transactions without an opt in under Regulation E? 
A:  The name and amount of the fee on the fee schedule should not have to change simply because you may not be able to impose it due to the opt in requirement of Regulation E.

Regulation DD requires that you disclose the conditions under which a fee may be imposed.  The commentary to Section 230.4 of Regulation DD states that it is adequate to indicate that the a fee applies to overdrafts that are “created by check, in-person withdrawal, ATM withdrawal, or other electronic means."  While an examiner may view such language to still be adequate, we believe that it would be a better practice to modify the language slightly to read that an overdraft fee applies "to the extent allowed by law, to overdrafts created by check, in-person withdrawal, ATM withdrawal, or other electronic means.”  This change may be made on a go-forward basis for new customers.  A change in terms notice will not be required for existing customers because the change is not adverse to the customer.

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