Overdrafts & Regulation E Opt-In Issues

If you allow customers to opt-in so that you can charge them overdraft fees for one-time debit card and ATM transactions, that is a benefit for your bank. If you get this benefit, then the customer should also get a benefit. Typically, we see that being an overdraft cushion of funds. If the customer doesn’t receive any benefit from opting in, you have not only Regulation E issues but potentially UDAAP as well.

Jerod explains more in the video.

Video Highlights:

• A Regulation E Opt-In should provide a benefit to the customer, such as a cushion of funds.
• Customers must be given the option to opt in for one-time debit and ATM transactions separately from other overdraft protection programs.
• Delayed benefits are not allowed; customers must receive their benefit at the same time that a bank receives theirs.

Published
2023/07/18