The Consumer Financial Protection Bureau provides an executive summary that explains the thresholds and associated dates:
Effective July 1, 2020, the final rule permanently raises the closed-end coverage threshold from 25 to 100 closed end mortgage loans in each of the two preceding calendar years. In 2017, the Bureau temporarily increased the open-end threshold to 500 open-end lines of credit for two years (calendar years 2018 and 2019). In October 2019, the Bureau extended the temporary threshold of 500 open-end lines of credit to January 1, 2022. Effective January 1, 2022, when the temporary threshold of 500 open-end lines of credit expires, the final rule sets the permanent open-end threshold at 200 open-end lines of credit in each of the two preceding calendar years.
(Answer provided March 2021.)Q: My bank implemented a “negative balance fee” (sometimes called an “extended overdraft fee.”) A consumer can trigger this negative balance fee even without an overdraft: It could occur due to a service fee or other transfer that puts the account into a negative balance. It can also occur due to a one-time debit or ATM transaction, insufficient funds to pay a check, or in any number of different ways. If a consumer did not opt in to Regulation E overdrafts, and the bank charges a negative balance fee, does the bank violate Regulation E? A: The commentary to the final rule states that any fee charged for an ATM or one-time debit card overdraft is subject to the opt-in requirement, including but not limited to a per item, per occurrence, daily, sustained overdraft, or negative balance fee (sustained overdraft fees). Moreover, in its clarification of the rule, released on May 28, 2010, Comment 17(b)-9 to §1005.17 addressed the treatment of sustained overdraft fees, stating that an institution may charge a sustained overdraft fee if a negative balance is attributable to mixed transactions—that is, check, ACH or other recurring debit card transaction and ATM or onetime debit transactions—for customers who have not opted in.
However, to be able to charge a sustained overdraft fee for mixed transactions, an institution must be operationally capable of determining whether the sustained negative balance is attributable solely to non-covered transactions. The comment also provides an alternative approach for those institutions without a deposit allocation policy or otherwise not operationally equipped to determine what is causing the continuing negative balance. In this instance, the institution may not assess sustained overdraft fees when mixed transactions have caused a continuing overdraft in an account for which a customer has not opted in. (Answer provided March 2021.)Q: Under §1002.7(d) of Regulation B (Equal Credit Opportunity Act), with certain exceptions, creditors may not require the signature of a credit applicant’s spouse or any other person— other than a joint applicant—on any credit instrument, if the applicant independently qualifies for the loan. If a bank’s underwriting policy requires the guaranty of all owners of a small business, is evidence of the guarantor’s intent to apply for joint credit required? A: No. Comment 2 to §1-2.7(d)(1) indicates that a joint applicant is someone who applies at the same time as the first applicant for shared credit—and someone whose signature is required as an underwriting condition because the applicant alone cannot qualify under the creditor’s standards. Note that Comment 1 to §1002.7(d)(6) permits a bank to require the guaranty of the owner(s) of a closely held business even if the business is creditworthy on its own. However, it may not require that the guaranty of the owner’s spouse, without further analysis. (Answer provided March 2021.)
Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, senior compliance analyst, ABA Regulatory Policy and Compliance. Answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of the response date shown at the end of each item.