Regulatory Alerts2024-10-02 | C1-2024-21908Consumer Financial Protection Circular 2024-05: Improper Overdraft Opt-In Practices
The Consumer Financial Protection Bureau issued Circular 2024-05 to clarify that financial institutions violate the Electronic Fund Transfer Act and Regulation E if they cannot prove they obtained consumers' affirmative consent before charging overdraft fees for ATM and one-time debit card transactions. The circular addresses whether a lack of proof regarding opt-in consent constitutes a legal violation, affirming that such absence of evidence results in non-compliance. It further notes that the specific form of records demonstrating consumer consent may vary depending on the channel through which the consumer opts into covered overdraft services.
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