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Washington
Compliance Challenge Reg E disclosures must be made individually
WASHINGTON (6/25/10)--In June’s edition of Compliance Challenge, the Credit Union National Association (CUNA) discloses that Regulation E does not allow credit unions to inform their members of new Reg E opt-in requirements via the credit union's newsletter. Opt-in notices must be provided before members may consent or opt in to the credit union's overdraft service for ATM and one-time debit card transactions, CUNA said. Those notices must inform the member on the steps needed to opt-in to the program. A credit union can provide a form to fill out and return in person or mail back to the credit union; a readily available telephone line that members can call to opt-in; or for members who have agreed to do business electronically, a Web-based form where members can click on a check box and then click a button to confirm their choice. Assuming the member elects to opt in, the credit union must send confirmation of the member’s opt-in choice in writing or electronically, if the member agrees to electronic communication. CUNA again addressed Reg E in a separate question that asked if credit unions may charge their members non-sufficient fund (NSF) fees when suspending the overdraft service for ATM and one-time debit card transactions. When asked recently by CUNA staff, Federal Reserve Board staff said that credit unions may charge fees in these instances since the member consented to the service and neither the credit union nor the member cancelled coverage. However, CUNA added, credit unions should notify their members that they may still incur NSF fees during the suspension period. Credit unions will have to craft these notifications very carefully in order to charge fees during this period, CUNA added. For the full compliance challenge, use the resource link.


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