FDIC: Comments on Overdraft Payment Supervisory Guidance


ABA Contact: Virginia O'Neill
Published Proposal: See FIL-47-2010; August 11, 2010
See FDIC's Final Guidance, November 24, 2010
Comments Due: September 27, 2010
Disposition: Filed

Summary of the Proposed Rule

The FDIC issued a Financial Institution Letter (FIL-47-2010) inviting comments on the Overdraft Payments Supervisory Guidance. The FIL reminds institutions to provide clear and meaningful disclosures and to demonstrate compliance with the recent changes to Regulation E regarding overdraft coverage of ATM withdrawals and one-time point of sale transactions.

Additionally, the FIL outlines several other expectations the FDIC has of institutions including:

  • Honor customer requests promptly to decline coverage of overdrafts resulting from non-electronic transactions.
  • Give customers the opportunity to choose the overdraft payment product that best meets their needs.
  • Monitor accounts and provide counsel to customers who overdraw six or more times during a rolling twelve month period. Take "meaningful and effective action" to limit customer use of overdraft protection as a form of short term, high cost credit and provide a reasonable opportunity for them to choose less costly coverage or to opt-out of fee-based overdraft coverage. 
  • Institute daily limits on overdraft fees.
  • Ensure that transactions are not processed in a manner to designed to maximize the cost to consumers.

ABA's Comment Guidance on FDIC FIL on Overdraft Practices

To encourage all bankers to draft a comment letter to the FDIC FIL on overdraft practices, ABA is providing an outline of key points for banker letters. The outline includes an address block and filing instructions. Comments are due by September 27, 2010.