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Compliance Answers to overdraft questions
WASHINGTON (3/17/10)--The Credit Union National Association (CUNA) has added five questions to its “frequently asked questions” (FAQ) on Regulation E’s new overdraft rules requiring members to consent before being assessed fees on overdraft services for ATM and one-time debit card transactions. The Reg E amendments become effective on July 1, 2010. CUNA will address the new Reg E overdraft requirements, as well as related Truth in Savings changes that became effective at the beginning of 2010, during a March 18 audio conference call. The program will not only review the rules, but will look at some practical issues in developing a compliance program. Meanwhile, in the FAQs, CUNA answers whether credit unions are still authorized to charge a fee for transferring funds from another account or a line of credit to cover an overdraft created by ATM or debit card usage. The answer is “yes,” according to CUNA, but credit unions must comply with Truth in Savings and Truth in Lending rules, CUNA explains. The new FAQs also address questions about how the new overdraft restrictions affect nonsufficient fund fees and negative balance fees that are currently being charged by credit unions. In another answer, CUNA alerts credit unions that if they want all the opt-in decisions for existing accounts to become effective on the same date, then they should state clearly on the opt-in/consent form that the member’s decision will be effective on August 15 or whatever earlier date that the credit union may select. August 15 is the date by which existing accountholders can no longer be charged overdraft fees for ATM and one-time debit transactions unless they have consented to the service. To read the FAQs and register for the audio conference, use the resource links.
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