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May the bank require our customers to opt-in to receive a debit card?

My bank has an ad hoc overdraft program and does not offer an opt-in for payment of debit card overdrafts. Generally, the bank declines any one-time debit card transactions that would overdraw a consumer's account, but, on occasion, there are the debit card charges that the bank must pay. The bank pays the merchant amount, does not notify the consumer and does not charge the consumer any overdraft fees. These types of transactions seem to be increasing, and it is becoming costly for the bank. The bank has been considering implementing the Regulation E opt-in process, but this seems to involve a lot of work, and the bank is a small bank. To make this worthwhile, management has asked if the bank may require our customers to opt-in to in order to receive a debit card. May the bank do this?

Your question is whether the bank may make agreeing to debit card overdraft services and fees a condition for obtaining a debit card. The answer is no.

Section 1005.17(b)(3) of Reg E provides that banks must “provide to consumers who do not affirmatively consent to the institution’s overdraft service for ATM and one-time debit cards transactions the same account terms, conditions, and features that it provides to consumers who affirmatively consent, except for the overdraft service for ATM and one-time debit card transactions.” The “same features” would include a debit card. (April 2020)

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