10.15.2010 / Regulation E, What does it mean?
In November 2009, the Federal Reserve amended Regulation E the Electronic Fund Transfer Act which changes the way banks extend overdraft coverage for ATM transactions and debit card purchases.
The amendment that was made to Regulation E mandates that, after July 1, 2010 for new customers and after August 15, 2010 for existing customers, banks can no longer apply their standard overdraft service to these types of transactions unless the customer had opted into having these charges covered.
Keep in mind that the Regulation E amendment only affects a financial institution’s standard overdraft service, which is different than overdraft protection.
- Overdraft protection allows a customer to link a checking account to a credit card, savings account or line of credit. Funds are moved automatically from your linked account to cover transactions and help the customer avoid an overdraft situation. If you have overdraft protection, your account will not change as result of Regulation E.
- Overdraft service, on the other hand, is a service provided as a courtesy to eligible customers. It is used to cover transactions when an account doesn’t have sufficient funds at the time of purchase. If used, overdraft fees may be applied.
It’s important to note that the amendment only covers ATM and everyday debit card purchases. Checks and automatic payments may still overdraft your account, so continue to monitor your account balances closely.
If you had not responded to the financial institutions inquiries regarding Regulation E prior to the August 15, 2010 deadline; you automatically were opted out of the service.
If you have questions about how Regulation E has affected your First National Bank checking account(s), please call your Personal Banker at (402) 341-RATE (7283) or 800-214-5160 outside of Omaha. Or visit one of our convenient locations.
