SUMMARY OF KEY REGULATION DD PROPOSALS:
The proposed amendments to Regulation DD would apply to all overdraft services offered by financial institutions, whether the institution markets the overdraft service or not.

Requires a financial institution that allows customers to opt-out of overdraft services to provide an opportunity for the customer to opt-out prior to the imposition of any overdraft fee.

Requires notice of fees and the initial opt-out to include the dollar amount of any fees or charges imposed on the account for overdraft service and requires disclosure that overdraft fees charged could exceed the amount of the overdraft. Also requires disclosure of any limit on overdraft transactions and any daily fees that may be charged.

Requests comment on whether the content of the initial opt-out and subsequent overdraft notices or periodic statements should contain the same or different text.

Requires that balance inquiries through automated systems (e.g., telephone, online, ATM, etc.) disclose available balance exclusive of any available line of credit or overdraft. An institution has the option of presenting a second amount that includes available overdraft if it chooses.

Requires disclosure of year-to-date and monthly aggregate fees for overdrafts charges and returned check charges on each periodic statement, in close proximity to disclosure of terms of overdraft service and method of opting out of overdraft.

Requests comment on whether electronic opt-out should be permitted and whether institutions should be required to provide a form with a check-off box for customers to fill out.

INFORMATION REQUESTED BY FIS FOR INCLUSION IN COMMENT LETTER:

Opt-Out/Fee Disclosures – Please identify the extent to which the proposed content requirements for the opt-out disclosures and aggregate fees would put additional burdens on your institution. Additionally, please let us know if you find any customer benefit in the proposals and/or if these benefits outweigh the additional costs to implement the changes. Please provide specific examples if at all possible.

Format of Periodic Statements and Disclosures – Please identify the impact to your institution of requiring the opt-out disclosure to be in close proximity to the listing of fees charged when reported on the periodic statements, and provide specific examples of any concerns you have.

Form of Opt-Out – Please describe any concerns you may have with a requirement to mail customers a form with a check-off box to permit them to opt-out of overdraft services, and/or whether you prefer that institutions have the option to allow customers to opt-out electronically.

Available Balance Disclosures – Please describe any concerns you have with the requirement that institutions provide customers with the available balance exclusive of available overdraft credit.

SUMMARY OF KEY REGULATION Z PROPOSALS:
The proposed amendments to Regulation Z would apply to all financial institutions offering open-end (non-home secured) credit products, such as credit cards, lines of credit, etc.

Due dates – Customers’ mailed payments arriving by 5pm on the due date must be considered timely; if the due date falls on a day when mail is not delivered, then payments received the following business day must be considered timely.

Terminology – The proposal replaces the term “grace period” with “interest free period”, establishes a definition of “promotional rate” to reflect special rates given to existing customers, and redefines “introductory rate” to indicate special rates given to newly opened accounts.

Subprime Accounts – An open-end credit account will be considered rejected by a customer if the customer does not use the account within 60 days. If rejected, the customer is not obligated to pay any fees or charges that were financed on the credit account. If the customer receives a bill and makes a payment toward the financed fees (if no other charges occurred) the account will be considered accepted by the customer and the customer will be liable for the fees.

Key Additional Disclosure Requirements – Specific events that lead to increased rates (e.g., late payments, etc.); foreign transaction fees in solicitations and applications; minimum or fixed finance charges greater than $1; for deferred interest products, the end date of deferred interest period on all statements during the period; for access checks that can be used after a promotional rate expires, disclosure that the checks remain valid but not at the promotional rate; summary of key terms at the time of opening any open-end loan product; oral disclosure of actual minimum credit available if account fees total 25% or more of the credit offered; disclosure of payment cut-off time for electronic payments, if prior to 5pm.

INFORMATION REQUESTED BY FIS FOR INCLUSION IN COMMENT LETTER:
Implementation – Please inform us as to the potential cost and difficulty your institution would have meeting these significant new disclosure requirements, including the financial impact to your institution as opposed to the potential benefit (or lack thereof) to your customers. For example, let us know if the statements’ length would be increased to a point of requiring increased postage and if the additional disclosures may be confusing to your customers, and why. Please also indicate the time frame that would be required to implement these changes if approved by the federal government.

Timeliness of Payments – Please let us know if it is feasible for your institution to consider timely any payments received the following business day, and what costs or other impact this may have on your operations if this change is adopted.

Subprime Accounts – Please describe whether and in which ways the proposal regarding rejection of credit products may be problematic to your institution.

Disclosures – Please indicate which disclosures you believe are unnecessary and why. It would be helpful to have examples and some indication of the specific concerns that are raised by proposed disclosures (e.g., timing, content, expense, potential for confusion).

1. email comment Letter Changes to: michael.weathers@fnis.com

2. Present Draft Comment Letter for Clients to use:

A. Regulation DD