[Anonymous]

Our customers are given a detailed disclosure at account opening that describes our bounce protection program and they can choose to have bounce protection or not. Is there any requirement to send a notice once they actually receive it (for us it is after 90 days in good standing)? I went to a deposit seminar with Ken last year and I know he mentioned to beware of these notices because they can look like you are promoting bounce protection. I was thinking we would just do away with the notice, but I wasn’t sure if there was a requirement to let the customer know when they actually receive it?

[rcooper]

I’m not aware of any requirement to have this disclosure. And I agree that these could be seen as promotional if you aren’t careful. If you continue to use the notice, make sure it includes information on other overdraft options, ways they can opt-out of your bounce protection, the cost of the program, how items will be paid, who to contact if they need counseling, etc. so it is more of a “know before you use” disclosure/ pre-counseling tool rather than promotional material. Take a look at the 2005 interagency guidance and the FDIC’s 2010 guidance on overdraft programs. Also, since Ken is the one who provided training, I recommend contacting him to clarify his thoughts.

[Author]

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