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Banks are aware that the regulatory environment surrounding overdrafts is now at the forefront of regulatory rulemaking and many still face confusion regarding which Overdraft Protection guidance is applicable to their bank. This awareness is attributed both to the increased scrutiny banks are experiencing during their regulatory examinations as well as the material number of regulatory documents issued on the subject by a host of regulatory agencies. No bank wishes to be the next bank taken to task for their overdraft practices which have withstood scrutiny for multiple examinations.
Beginning in 2005, there have been various interagency guidance or examination manuals issued primarily by the FDIC and OCC that appear to be only applicable to their member banks. Additionally, the CFPB has been very active in this subject-matter area and has issued whitepapers and related reports, blog articles, and various other communications which outline the intent to issue proposed rulemaking over the coming months. A webinar on the issue in late 2016 included all regulatory agencies and gave us further insight.
This two-hour recording identifies which guidance was issued on an interagency basis and is applicable to all banks, as well as, the guidance and examination handbooks which were issued by singular agencies intended for their member banks only. We will also address the CFPB releases and the intended or implied guidance for all banks that offer one of the various forms of overdraft products. If your bank has been struggling with the development of its own automated overdraft policy – don’t worry, one is provided in our manual. This recording is intended for a wide range of bank personnel who are involved in the first, second or third line of defense for this area.
Some of the earliest guidance on this issue has been rendered somewhat obsolete by technological advances. Almost all banks offer an automated overdraft product and your product needs to be in alignment with your risk profile but also in alignment with the pricing structure of your peers. Regulatory guidance states that this product will be reviewed during all compliance examinations. Any findings likely will be assessed as a potential unfair or deceptive act. This program:
- Identifies problem areas highlighted in consent decrees and regulatory guidance;
- Addresses automated overdraft issues triggered by regulations CC and E;
- Addresses the list of potential responsibilities that will be addressed in the upcoming CFPB rulemaking;
- Identifies particular practices which have the highest risk of being designated as a UDAP issue; and
- Provides suggestions, including a list of industry best practices and regulatory agency recommendations to avoid and/or correct identified issues.
You’ll receive PowerPoint slides and a detailed manual that serves as valuable resources long after the conclusion of the program.
Upon completion of the program participants understand regulatory expectations regarding:
- Opt-in, opt-out or blanket coverage for non-Regulation E covered products and regulatory expectations;
- Policy and program requirements;
- Board and Senior Management oversight;
- Legal and regulatory risks;
- Reputational risks;
- Call Report impact;
- Transaction clearing order and the problems caused by reordering of transactions;
- Cascade expectations of alternative (less costly) products;
- Bank’s discretionary right to pay;
- Promotion or marketing as “free” or “low-cost”;
- Fee regimen including initial, continuous or negative balance;
- Steering; and
- Assessment of a reasonable fee to correlated service.
The program is designed for Compliance Officers, Branch Administration, Deposit Operations, Senior Management, Auditors, and those responsible for the development, implementation, maintenance and oversight of a bank’s overdraft protection program.