Banks and credit unions can be held legally liable if there is no proof that they obtained affirmative consent from customers before charging overdraft service fees for ATM and debit card transactions, the Consumer Financial Protection Bureau said today in a circular intended for regulators and law enforcement.
The circular re-states Regulation E’s “opt-in” requirement that financial institutions must obtain the customer’s consent — or opt-in — before imposing a fee for an overdraft resulting from a point-of-sale debit card or ATM transaction. The CFPB stated that Regulation E “sets forth an opt-in, rather than opt-out, process before financial institutions are permitted to assess fees for covered overdraft services,” the bureau said.
The form of records showing consent varies depending on the channel through which the consumer opts into overdraft services, according to the CFPB. For example, for consumers who opt into overdraft services in person or by postal mail, a copy of a form signed or initialed by the consumer would constitute proof. Recorded phone calls and securely stored and unalterable “electronic signatures” also would be considered proof.
