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My bank allows consumers to opt in for payment of ATM and one-time debit card transactions. Must the bank provide notice to customers at the time of each transaction to inform them that the transaction will overdraw the account and a fee will be charged and to allow them to discontinue the transaction?

No. There is nothing in Regulation DD (Truth in Savings Act) or Regulation E (Electronic Fund Transfer Act) that requires that the customer receive notice at the time of the ATM transaction that proceeding with the transaction will cause an overdraft and they will incur an overdraft fee. Nor is there a requirement to provide such a notice at POS.

Customers who have opted into debit card overdraft services may avoid the overdraft and fee by checking their balances. Section 1030.11(c) of Regulation DD requires institutions that provide a balance through an “automated system,” for example, an ATM, phone, or online banking service, to exclude from that account balance additional discretionary amounts that might be available for overdrafts. Institutions may, at their option, provide an additional balance that includes such additional amounts if it is prominently stated that such balance includes the additional amount. (February 2017)

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