Reg. E — There’s Misinformation Out There
Imagine, there’s a federal regulation that’s confusing people. Who would have guessed?
But it’s true. Regulation E compliance is generating confusing theories and ideas about how it should be handled. I found a few of these myths today in a newsletter from Strunk & Associates, a company that offers overdraft programs to financial organizations. I thought I’d repeat Strunk’s list so you’re aware and aren’t fooled if you hear this misinformation.
Myth 1: A senior regulator in the Midwest is saying you must give the consumer the ability to opt-out of one-time debit card and ATM overdrafts. This is NOT true.
Myth 2: A major national association told its members you must give the consumer an opt-out notice on each periodic statement where an overdraft fee is charged. NOT true.
Myth 3: One of the largest data processors in the U.S. told its clients they should wait until July 1 before asking consumers to opt-in, in case they wanted to opt-out. NOT true.
Myth 4: A well-known compliance service provider recently told financial institutions they could get opt-in confirmation from consumers before July 1, but they must start complying with the regulation immediately if they did so. Also, NOT true.
What we do know is that the changes are firmly written in sand, so you can expect the winds to blow in new interpretations. For example, as originally written, your were required to shut off overdraft protection as soon as you mailed out the notices. That’s changed as the feds rethought and altered the interpretation.
There could still be other reinterpretations of the regulation by the feds as we get closer to July 1. Keep your eyes open and ears attentive. Double-check what you hear or read.
ACTON Marketing’s legal counsel, who formerly worked for the FDIC, is following the situation closely. You can always contact us if you’re uncertain of what Reg. E requires.