(a) Definition. For purposes
of this section, the term “overdraft service” means a service under
which a financial institution assesses a fee or charge on a consumer’s
account held by the institution for paying a transaction (including
a check or other item) when the consumer has insufficient or unavailable
funds in the account. The term “overdraft service” does not include
any payment of overdrafts pursuant to:
(1) A line of credit subject to Regulation
Z (12 CFR part 1026), including transfers from a credit card account, home
equity line of credit, or overdraft line of credit;
(2) A service that transfers funds from
another account held individually or jointly by a consumer, such as
a savings account;
(3) A line of
credit or other transaction exempt from Regulation Z (12 CFR part
1026) pursuant to 12 CFR 1026.3(d); or
(4) A covered separate credit feature accessible by a hybrid prepaid-credit
card as defined in Regulation Z, 12 CFR 1026.61; or credit extended
through a negative balance on the asset feature of the prepaid account
that meets the conditions of 12 CFR 1026.61(a)(4).
(b) Opt-in requirement.
(1) General. Except as provided under paragraph (c) of this section, a financial
institution holding a consumer’s account shall not assess a fee or
charge on a consumer’s account for paying an ATM or one-time debit
card transaction pursuant to the institution’s overdraft service,
unless the institution:
(i) Provides the consumer with a notice in writing, or if the consumer
agrees, electronically, segregated from all other information, describing
the institution’s overdraft service;
(ii) Provides a reasonable opportunity
for the consumer to affirmatively consent, or opt in, to the service
for ATM and one-time debit card transactions;
(iii) Obtains the consumer’s affirmative
consent, or opt-in, to the institution’s payment of ATM or onetime
debit card transactions; and
(iv) Provides the consumer with confirmation of the consumer’s consent
in writing, or if the consumer agrees, electronically, which includes
a statement informing the consumer of the right to revoke such consent.
(2) Conditioning payment of other overdrafts on
consumer’s affirmative consent. A financial institution shall
not:
(i) Condition
the payment of any overdrafts for checks, ACH transactions, and other
types of transactions on the consumer affirmatively consenting to
the institution’s payment of ATM and one-time debit card transactions
pursuant to the institution’s overdraft service; or
(ii) Decline to pay checks, ACH transactions,
and other types of transactions that overdraw the consumer’s account
because the consumer has not affirmatively consented to the institution’s
overdraft service for ATM and one-time debit card transactions.
(3) Same account terms, conditions, and features. A financial institution shall provide to consumers who do not affirmatively
consent to the institution’s overdraft service for ATM and one-time
debit card transactions the same account terms, conditions, and features
that it provides to consumers who affirmatively consent, except for
the overdraft service for ATM and one-time debit card transactions.
(c) Timing.
(1) Existing
account holders. For accounts opened prior to July 1, 2010, the
financial institution must not assess any fees or charges on a consumer’s
account on or after August 15, 2010, for paying an ATM or onetime
debit card transaction pursuant to the overdraft service, unless the
institution has complied with section 1005.17(b)(1) and obtained the
consumer’s affirmative consent.
(2) New account holders. For accounts
opened on or after July 1, 2010, the financial institution must comply
with section 1005.17(b)(1) and obtain the consumer’s affirmative consent
before the institution assesses any fee or charge on the consumer’s
account for paying an ATM or one-time debit card transaction pursuant
to the institution’s overdraft service.
(d) Content and format. The notice required
by paragraph (b)(1)(i) of this section shall be substantially similar
to Model Form A-9 set forth in Appendix A of this part, include all
applicable items in this paragraph, and may not contain any information
not specified in or otherwise permitted by this paragraph.
(1) Overdraft
service. A brief description of the financial institution’s overdraft
service and the types of transactions for which a fee or charge for paying
an overdraft may be imposed, including ATM and one-time debit card
transactions.
(2) Fees imposed. The dollar amount of any
fees or charges assessed by the financial institution for paying an
ATM or one-time debit card transaction pursuant to the institution’s
overdraft service, including any daily or other overdraft fees. If
the amount of the fee is determined on the basis of the number of
times the consumer has overdrawn the account, the amount of the overdraft,
or other factors, the institution must disclose the maximum fee that
may be imposed.
(3) Limits on fees charged. The maximum number
of overdraft fees or charges that may be assessed per day, or, if
applicable, that there is no limit.
(4) Disclosure of opt-in right. An
explanation of the consumer’s right to affirmatively consent to the
financial institution’s payment of overdrafts for ATM and one-time
debit card transactions pursuant to the institution’s overdraft service,
including the methods by which the consumer may consent to the service;
and
(5) Alternative plans for covering overdrafts. If the institution
offers a line of credit subject to Regulation Z (12 CFR part 1026)
or a service that transfers funds from another account of the consumer
held at the institution to cover overdrafts, the institution must
state that fact. An institution may, but is not required to, list
additional alternatives for the payment of overdrafts.
(6) Permitted
modifications and additional content. If applicable, the institution
may modify the content required by section 1005.17(d) to indicate
that the consumer has the right to opt into, or opt out of, the payment
of overdrafts under the institution’s overdraft service for other
types of transactions, such as checks, ACH transactions, or automatic
bill payments; to provide a means for the consumer to exercise this
choice; and to disclose the associated returned item fee and that
additional merchant fees may apply. The institution may also disclose
the consumer’s right to revoke consent. For notices provided to consumers
who have opened accounts prior to July 1, 2010, the financial institution
may describe the institution’s overdraft service with respect to ATM
and one-time debit card transactions with a statement such as “After
August 15, 2010, we will not authorize and pay overdrafts for the
following types of transactions unless you ask us to (see below).”
(e) Joint relationships. If two or more consumers jointly hold an account, the financial
institution shall treat the affirmative consent of any of the joint
consumers as affirmative consent for that account. Similarly, the
financial institution shall treat a revocation of affirmative consent
by any of the joint consumers as revocation of consent for that account.
(f) Continuing right to opt in or to
revoke the opt-in. A consumer may affirmatively consent to the
financial institution’s overdraft service at any time in the manner
described in the notice required by paragraph (b)(1)(i) of this section.
A consumer may also revoke consent at any time in the manner made
available to the consumer for providing consent. A financial institution
must implement a consumer’s revocation of consent as soon as reasonably
practicable.
(g) Duration and revocation
of opt-in. A consumer’s affirmative consent to the institution’s
overdraft service is effective until revoked by the consumer, or unless
the financial institution terminates the service.
