Overdrafts
Laws and legal information about overdrafts
Highlights of Final Reg. DD Rules Regarding Overdraft Services
The final rule amends Regulation DD to address depository institutions' disclosure practices related to overdrafts. The effective date for the Regulation DD amendments is January 1, 2010.Disclosure of Aggregate Overdraft FeesThe final rule extends to all institutions the requirement to disclose on periodic statements the aggregate dollar amounts charged for overdraft fees and for returned item fees (for the statement period and the year-to-date). Currently, only institutions that promote or advertise the payment of overdrafts must disclose aggregate amounts.Disclosure of Balance InformationThe final rule requires institutions that provide account balance information through an automated system to provide a balance that does not include additional funds that may be made available to cover overdrafts.Source: Federal Reserve Read more
Proposed Reg. E Rules on Overdrafts
The proposal amends Regulation E to provide consumers certain protections relating to the assessment of overdraft fees. The proposal replaces previously proposed amendments under Regulations AA and DD addressing overdraft services. Consumer Choice Regarding Overdraft Services The proposal solicits comment on two approaches to providing consumers a choice regarding the payment of ATM and one-time debit card overdrafts by their financial institution. Opt-out. Under one approach, an institution would be prohibited from imposing an overdraft fee unless the consumer is given an initial notice and a reasonable opportunity to opt out of the institution's overdraft service, and the consumer does not opt out. Opt-in. The second approach would prohibit an institution from imposing an overdraft fee for paying such overdrafts unless the consumer affirmatively consents (or opts in) to the institution's overdraft service. Debit Holds The proposal would prohibit institutions from imposing an overdraft fee when the account is overdrawn because of a hold placed…