Posted by Anthony Demangone
When working to comply with NCUA's Truth in Savings regulation regarding overdraft protection programs, don't forget about the changes concerning how you disclose balances. In short, if you disclose balances to a member through an "automated system," the balance cannot include any additional ODP-related balance that could be used to clear the item. You "may," if you wish, disclose such additional ODP-related balance if you prominently state that any such amount includes such additional ODP amounts, and, if applicable, that such amounts are not available for all transactions.
So, what are "automated systems?" They would include any automated system through which a member can request an account balance, such as online banking, telephone-based systems, and ATMs.
Want some homework? I'd check to see where you disclose automated balances to see if you need to make any changes.
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HUD really took this one to the wire. They finally updated their RESPA settlement cost booklet roughly 2 weeks before it's use becomes mandatory. Happy printing.
Does the new TIS balance disclosure requirements apply to the "open to buy" balance sent for debit card purchasing?
Posted by: Joanne | December 17, 2009 at 09:15 AM
I'm not sure what that is. Is it a balance disclosed to the member through an automated system? If so, then it would appear to be covered. If not, then not.
Posted by: Anthony Demangone | December 17, 2009 at 09:18 AM
Currently Card Processors (and core processors) allow their financial institutions to combine checking with savings and line of credit balances into an "open to buy" bucket for POS authorizations. I doubt that processors are able to send an "open to buy" just for purchasing and separate balances to ATM's - so I am thinking these balances can no longer be combined. Financial institutions will need to contact their processors and make the change to comply with TIS if that is the case - right?
Posted by: Joanne | December 21, 2009 at 07:50 AM
Again, I can't say based on your question. Is this balance disclosed to the member via an automated system? If so, it could be covered. Second, if it is disclosed to the consumer, does it include an overdraft balance as outlined in the reg? I'm not sure that it does. It sounds like it simply combines savings and share draft balances.
Posted by: Anthony Demangone | December 21, 2009 at 10:02 AM