Alert February 23, 2010

FRB Issues Proposed Clarifications to New Overdraft Rules

The FRB proposed clarifications to aspects of its November 2009 final rule under Regulation E and its December 2008 final rule under Regulation DD pertaining to overdraft services. The proposals are intended to address questions that have arisen and to provide further guidance regarding compliance with certain aspects of the final overdraft rules.  In particular, the proposals would clarify that the prohibition in Regulation E on assessing overdraft fees without the consumer's affirmative consent applies to all institutions, including those with a policy and practice of declining ATM and one-time debit card transactions when an account has insufficient funds. Click here for the Regulation E Federal Register notice and here for the Regulation DD Federal Register notice.  Comments on the proposals must be submitted within 30 days after publication in the Federal Register, which is expected shortly.