Changes to Overdraft Rules – Frequently Asked Questions
Regulation E Overdraft Rules require that consumers consent to overdraft protection services for ATM withdrawals and everyday debit card transactions. As an account holder, it is important to understand your overdraft options at Rollstone Bank & Trust (RBT). Compiled here is a short list of questions that cover a range of topics related to overdrafts, the regulations and how they affect you.
What is an Overdraft?
An overdraft occurs when you do not have enough money in your account to cover a payment or withdrawal you have authorized, but the bank pays it as an accommodation, trusting that you will repay the amount of the overdraft.
Overdraft rules affect debit card transactions, specifically ATM transactions and everyday debit transactions made for purchases at a store, by telephone or on the internet. The rule states that you must expressly agree, or opt-in, before the bank may charge you a fee for paying ATM withdrawals or debit card transactions that will cause an overdraft on the account.
There are 4 Easy Ways to opt-in.
1. By Phone: Call (978)345-1061
2. By Mail: Send us a letter requesting to opt-in. Be sure to sign and date the letter, and include your account number(s) on it.
3. Online: Follow this link to fill out our secure online consent form.
4. In Person: You can also fill out a form at any of our locations.
Also, please know that you can change your mind at any time.
What is an “everyday” debit card transaction?
An everyday debit transaction, or non-recurring transaction, is one that you did not pre-authorize and is not recurring. For example, using your debit card to pay for your groceries or lunch is an everyday transaction because it was not previously authorized.
Can I opt-in for Overdraft Privilege for debit transactions and not ATM withdrawals?
No. The new regulation groups these two transactions into the same category.
What happens if I do not opt in and I overdraw my account using the ATM or by using my debit card at grocery store or the gas station.
If the transaction overdraws your account at the ATM or grocery store, etc., your transaction will be declined. If you opt in for Overdraft Privilege, this transaction will be paid. If we do not hear from you, we will assume you do not want the service and will therefore be declined (after August 14, 2010).
When did the rules go into effect?
The choice made for ATM withdrawals and everyday debit card transactions began August 15, 2010.
Do I have to opt-in for all my accounts?
You must give consent for each checking account in which you use an ATM card or debit card for transactions. You do not need to opt-in for business/commercial accounts.
Are there fees if I opt-in?
There is no annual fee for Overdraft Privilege. You will pay a $30 fee for each transaction that overdraws your account.
May I opt-in at the time of the debit card transaction?
No. You must opt-in in advance. If you think you will want your ATM withdrawals and everyday debit card overdrafts paid, you should opt-in before you need it.
I have a joint account with my husband; do we both have to sign the opt-in form?
No, only one owner of the account needs to opt-in.
I received a confirmation notice in the mail, do you need it back?
No, the confirmation notice is yours to keep. It is your record that we received your opt-in consent.
How does the bank know my debit card transaction is a one-time, everyday transaction versus a recurring transaction?
The type of debit card transaction is determined by a special code the merchant submits with the payment transaction.
RBT sometimes pays my checks, automatic payments or recurring debit card transactions, such as my mortgage, even if I do not have enough money in the account. If I do not “opt-in,” will you still continue to pay these types of transactions even if I do not have enough money in the account?
The regulation allows RBT to continue paying checks, ACH or recurring debit card transactions at our discretion without your consent. Many of our customers appreciate knowing their important checks and payments may be paid even if your account balance falls a little short.
What about automatic bill payments that I have arranged to be paid through my debit card?
Automatic bill payments made through your debit card may still be paid, and a fee will be charged even if you have not opted in.
Do I have any other options if I want payments made when there is not enough money in the account to cover them?
Yes. Besides Overdraft Privilege, we also offer an Easy Line of Credit (ELOC), (a revolving line of credit attached to your checking account) and Overdraft Transfer, an automatic transfer from your Rollstone Bank & Trust savings account. With an ELOC, you are charged interest on your outstanding balance. Each Overdraft Transfer is assessed a fee, currently $5.
Are there any other ways to avoid overdrafts?
The easiest way to avoid overdrafts is to keep track of your transactions and balance. You are also less likely to overdraw if you keep extra money – a cushion – in the account. Use Online Banking to check your accounts, and sign up for balance alerts, so you get notified when your balance falls below an amount you choose.
Do you have a question that was not answered here?
Please call us at (978)345-1061 or come by any RBT branch and we’ll be happy to help you.