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News Now

Washington
Compliance Respond quickly to opt-in requests
WASHINGTON (9/20/10)--In the event that a credit union member elects to revoke his or her overdraft opt-in status, the Credit Union National Association (CUNA) has recommended that credit unions react by honoring this request “as soon as realistically possible.” In September’s Compliance Challenge, CUNA said that Regulation E specifically states that credit unions (and other financial institutions) must implement an opt-in revocation request “as soon as reasonably practicable.” The Fed did not prescribe a specific period of time for the credit union to honor the member’s revocation request. That's because “the appropriate time period may depend on a number of variables, including the method used by the consumer to communicate the revocation request (for example, in writing or orally) and the channel by which the request is received (for example, if a consumer sends a written request to an address specifically designated to receive consumer opt-in and revocation requests),’” CUNA added. Opt-in requests are effective until a member/customer revokes opt-in consent, or the financial institution no longer provides the service. The Compliance Challenge also covered the notifications that credit unions must provide to members that opt-in to overdraft programs. According to CUNA, the Federal Reserve determined that requiring “subsequent notice” of a member’s overdraft status “is unnecessary when the consumer has affirmatively elected to enroll in the overdraft service and ... receives a record of their right to revoke their opt-in.” Credit unions that simply provide written or, in some cases, electronic overdraft program consent forms to their members, and confirm that consent with their members, are in compliance with the newly established overdraft rules. For more of CUNA’s September Compliance Challenge, use the resource link.


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