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.
Legal and Compliance Risk Department