On Sept. 17, 2024, the Consumer Financial Protection Bureau (CFPB) issued a circular on what it deems an improper overdraft opt-in practice. The practice involves a financial institution not retaining proof it obtained affirmative consent from consumers to enroll them in covered overdraft services. 

Before a financial institution may charge a consumer a fee in connection with an ATM or one-time debit transaction, Regulation E requires the financial institution to provide consumers with a “reasonable opportunity for the consumer to affirmatively consent, or opt in” to covered overdraft services, and to obtain the consumer’s “affirmative consent, or opt in” to such services. Consequently, according to the CFPB, examiners should inspect the financial institution's records to determine whether there is evidence of affirmative consent to enrollment in covered overdraft services.

The CFPB has found some institutions have been unable to provide evidence consumers had opted into overdraft coverage before they were charged fees for ATM and one-time debit transactions. The CFPB expects institutions to maintain records to prove the consumer’s affirmative consent to enrollment in covered overdraft services.

The form of the records depends on the channel through which the consumer opts into covered overdraft services. The CFPB provides the following examples:

• For consumers who opt into covered overdraft services in person or by postal mail, a copy of a form signed or initialed by the consumer indicating the consumer’s affirmative consent to opting into covered overdraft services would constitute evidence of consumer consent to enrollment.
• For consumers who opt into covered overdraft services over the phone, a recording of the phone call in which the consumer elected to opt into covered overdraft services would constitute evidence of consumer consent to enrollment.
• For consumers who opt into covered overdraft services online or through a mobile app, a securely stored and unalterable “electronic signature” as defined in the E-Sign Act (15 U.S.C. 7006(5)) conclusively demonstrating the specific consumer’s action to affirmatively opt in and the date the consumer opted in would constitute evidence of consumer consent to enrollment.

Want to ensure your financial institution is in compliance with Reg. E? Doeren Mayhew's regulatory compliance pros are here to show you the way.