Q: The Guidance states that the FDIC believes institutions should allow customers to decline overdraft coverage (i.e., opt-out) for payment of overdrafts resulting from non-electronic transactions such as paper checks or automated clearing house (ACH) transfers. Can you clarify to which transactions this recommendation applies?
A: To promote consumer choice and awareness, institutions are encouraged to permit customers to decline overdraft coverage (i.e., opt-out) for transactions that are not subject to the Regulation E opt-in requirements, including checks, ACH transactions and recurring debits. As part of an institution’s on-going relationship with its customers, the FDIC recommends that institutions consider occasional communications to remind customers of available options to terminate overdraft coverage.
This can be found in FAQ IV-3 of the FDIC’s Overdraft Payment Program Supervisory Guidance FAQs. The FAQs can be found at: http://www.fdic.gov/news/conferences/overdraft/FAQ.html