Federal Reserve Requires Banks to Implement New Overdraft Procedures and Related Disclosures
The Federal Reserve emphasized its newly donned role of the consumer protector on November 12, 2009 when it issued final revisions to Regulation E (the “Final Rule”) that will require many banks to revise their existing procedures for paying and disclosing consumer overdrafts that result from automated teller machine (“ATM”) and one-time debit card transactions. Banks are required to achieve full compliance with the Final Rule by July 1, 2010. For many banks, it is likely that full compliance will involve significant operational and processing changes, as well as the implementation of new procedures and new customer disclosures. These types of changes take time to implement, and so we recommend that banks act immediately to assess their overdraft protection services in light of the Final Rule, in order to determine what changes will be necessary to achieve timely compliance.
