Circular
Regulation DD Amended to Address Concerns about Information on Overdrawn Deposit Accounts, Effective July 1, 2006
May 23, 2005
Circular No. 11711

To All Depository Institutions and Others Concerned
in the Second Federal Reserve District:

The Board of Governors of the Federal Reserve System on May 19, 2005, published final amendments to Regulation DD, which implements the Truth in Savings Act, and the regulation's official staff commentary to improve the uniformity and adequacy of information provided to consumers when they overdraw their deposit accounts.

The final amendments, in part, address a specific service provided by many depository institutions to pay checks and allow other transactions when there are insufficient funds in an account. This service is often referred to as "bounced-check protection" or "courtesy overdraft protection."

To assist consumers in understanding the financial impact of overdrawing their accounts, the final rule requires institutions that promote the payment of overdrafts in an advertisement to disclose on periodic statements the total dollar amount imposed for overdraft fees and the total dollar amount imposed for returned-item fees, both for the statement period and for the calendar year to date.

The final rule is effective July 1, 2006.

Press release OFFSITE
Board’s notice OFFSITE PDF

Contact:
Maryann Campbell
Supervising Examiner
Legal and Compliance Risk Department
maryann.campbell@ny.frb.org

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