ARLINGTON, Va.—What defines affirmative consent for overdraft protection and how that consent is confirmed?
NAFCU Regulatory Compliance Specialist Alma Calcano is reminding credit unions that “for any courtesy pay or overdraft protection offered for ATM and one-time debit card transactions, Regulation E requires disclosures and the member’s affirmative consent (opt-in) to coverage for those transactions and the associated fee.”
She noted that the various means credit unions are allowed to obtain consumers’ affirmative consent include:
- By mail – The credit union provides a form for the consumer to fill out and mail to affirmatively consent the service.
- By telephone – The credit union provides a readily available telephone line that consumers may call to provide affirmative consent
- By electronic means – The credit union provides an electronic means for the consumer to affirmatively consent
- In person – The credit union provides a form for the consumer to complete and present at a branch or office to affirmatively consent to the service
Disclosure Requirement
“However, it is necessary for credit unions to comply with the disclosure requirements regardless of the method,” she said.
Calcano also noted that Regulation E also requires credit unions to provide confirmation that a member has consented (opted-in) to participate in the overdraft service, though it does not require credit unions to provide confirmation when a member declines to participate or revokes consent.