CSBS Supports Allowing Customers to Opt In to Automatic Overdraft Service

by 01 Apr 2009
WASHINGTON, D.C. -- The Conference of State Bank Supervisors (CSBS) indicated to the Federal Reserve Board it supports proposed amendments to Regulation E that would limit the availability of a financial institution to assess an overdraft fee for paying ATM withdrawals and one-time debit card transactions unless the consumer has opted in or out of a financial institution?s overdraft service. In a comment letter issued this week, CSBS President and CEO Neil Milner said the Board?s proposal would protect consumers while creating minimum burdens on financial institutions. Milner said CSBS believes proposing both the opt out and opt in approaches gives institutions flexibility but added that CSBS prefers the opt in approach. Recognizing that programming changes would be required, CSBS suggested a 6-12 month phase-in period for institutions to implement the new requirements of Reg E. CSBS also suggested that Board encourage institutions to provide real-time disclosure for ATM transactions. "CSBS believes technology is available to calculate a customer's balance and to alert the consumer if the transaction in progress will overdraw the account," Milner said. CSBS also commended the Board for encouraging institutions to provide multiple options for consumers to opt in or out of the program. CSBS's comment letter can be viewed here. http://www.csbs.org/Content/NavigationMenu/RegulatoryAffairs/CommentLetters/Commentletteronoverdraftservices.pdf



Is TILA-RESPA a good or bad thing long term?