Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Compliance When negative balance fees may be charged
WASHINGTON (1/15/10)--Changes to many financial institution business practices, including overdraft fees, have been all the rage in Congress lately, and this month’s Credit Union National Association (CUNA) Compliance Challenge addresses overdraft fees, asking if the newly proposed Regulation E overdraft rule allows credit unions to charge a negative balance fee when the member’s ATM/debit card overdraft leads to a negative balance for a long period of time. The Federal Reserve Board recently changed Reg E to require institutions to inform and to acquire the consent of account holders before they can charge overdraft fees for ATM and one-time debit card transactions. Consumers may revoke this consent at any time, and financial institutions must provide the same types of accounts to all members or customers, whether they choose to opt in or not. According to CUNA, the new Reg E rule does not change, whether you call the fee an “overdraft fee” or a “negative balance fee.” Any fee that results from an ATM/one-time debit card overdraft is covered by the regulation. Thus, credit unions will only be allowed to charge these types of fees for ATM and one-time debit card overdrafts, beginning on July 1st (or on August 15th for existing members) if the credit union member has been notified in writing of the overdraft service and fully opts-in to the service. The notification must disclose all overdraft fees, including per item fees, daily overdraft fees, and sustained overdraft fees, CUNA added. For the full Compliance Challenge, use the resource link.


RSS print
News Now LiveWire
Goodwill Industries latest to report data security breach http://t.co/gIaXNsT4Bk
12 hours ago
CUNA economist Schenk discusses regulators' focus on interest-rate risk. See CU Magazine: http://t.co/tW1p9rTSSv
13 hours ago
Fed issues annual report on general-use prepaid cards in gov't-administered payment programs. http://t.co/3zPhejSPZt
13 hours ago
Children in foster care face higher risk of identity theft via @NBCNews http://t.co/Dif0hCfBdA
13 hours ago
.@Cornerstone_CUL's leadership conference includes food drive for San Antonio food bank http://t.co/h2O8O4TxuD
14 hours ago