Federal Deposit
Insurance Corporation

• Provide clear and meaningful disclosures and other communications about overdraft payment programs, features and options; and
• Demonstrate compliance with new overdraft fee disclosure requirements and, upon the effective date, new regulations that mandate providing a notice and reasonable opportunity for customers to affirmatively choose fee-based overdraft coverage of ATM withdrawals and one-time point-of-sale debit card transactions.

• Promptly honor customers’ requests to decline coverage of overdrafts (i.e., opt out) resulting from non-electronic transactions;
• Give consumers the opportunity to affirmatively choose the overdraft payment product that overall best meets their needs;
• Monitor accounts and take meaningful and effective action to limit use by customers as a form of short-term, high-cost credit, including, for example, giving customers who overdraw their accounts on more than six occasions where a fee is charged in a rolling twelve-month period a reasonable opportunity to choose a less costly alternative and decide whether to continue with fee-based overdraft coverage;
• Institute appropriate daily limits on overdraft fees; and
• Not process transactions in a manner designed to maximize the cost to consumers.

Institutions using a third-party vendor for their overdraft payment programs must exercise careful oversight, as discussed in the FDIC's 2008 Guidance for Managing Third-Party Risk. The FDIC will take supervisory action where overdraft payment programs pose unacceptable safety and soundness or compliance management system risks or result in violations of laws or regulations, including unfair or deceptive acts or practices and fair lending laws.