FAQs about REG - E

Opt-in/Opt-out Frequently Asked Questions:

1. What is Regulation E? Regulation E carries out the purposes of the Electronic Fund Transfer Act, which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The primary objective of the act and this part is the protection of individual consumers engaging in electronic fund transfers.
2. What is a Courtesy Pay Program/Courtesy Pay services? When a member does not have sufficient funds on deposit to cover a check or ACH item or authorize a debit card or ATM transaction, a financial institution can choose to cover an item for a fee, rather than return or decline the transaction. In the past, FCCU members had the choice to turn off the courtesy pay privileges for everything. The new regulation gives you the right to keep courtesy pay privileges for checks and ACH, but not have them for debit card and ATM transactions.
3. Why do I have to opt in or out? The Federal Reserve wanted consumers to have the option whether to have debit card and ATM transactions covered under a financial institution’s standard courtesy pay program or not. The regulators require that you Opt In if you want items covered (and be charged a fee) rather than simply denied.
4. What happens if I don’t opt in or out? The regulators require that we assume you Opted OUT of courtesy pay for debit and ATM and to decline your transactions.
5. What if I opt out and need to use my debit card 3 days before my payday? You can change your mind and Opt In at a later date. However, we will need time to process the request, so the service may be delayed up to 2 business days before it takes effect and debit card and ATM transactions would be declined in the meantime if you have insufficient funds available in your account.
6. Can I opt in now and change my mind later? Yes.
7. Do I have to opt in or out on ALL my Florida Commerce account’s separately? Yes. Each checking account requires a separate decision.
8. Can I opt out for my child’s Teen account? Yes, an account owner may opt out, although we don’t offer courtesy pay privileges to teenagers under the age of 18. However, when they become 18, they may qualify for courtesy pay privileges, and the decision made now will continue to apply unless they change it. If the parent is not an owner of the account, they are not allowed to make the decision to Opt-in or Opt-out.
9. Can the joint on an account make the opt-in or out decision or must the primary? We will take instructions from any joint owner. The last instruction we receive will be the one that we follow.
10. Will this affect the checks that I write or ACH withdrawals that I have set up? No – we will apply our standard courtesy pay policy to those items.
11. You don’t provide me courtesy pay privileges now – is there any reason I should opt in now? We review accounts twice a year and try to re-instate the courtesy pay privileges whenever possible. Opting In now will assure you receive the courtesy pay privileges on debit and ATM if that service is restored to you in the future. Keep in mind, though, by Opting In now – you could be subject to NSF fees if merchants don’t authorize your transaction for the correct amount and you aren’t keeping track of your balance yourself.
12. I’ve Opted Out of the courtesy pay program already – why am I being asked again? Before, it was all or nothing. Now you have a choice. We can limit the courtesy pay program so that it only applies to checks, recurring debit card transactions and ACH withdrawals. Debit card and ATM transactions would simply be declined. It’s your choice.
13. Does this Reg only deal with debit card transactions? The changes apply to only one-time Debit card and ATM transactions.
14. If I opt out does that mean that my check will be returned? If so what fee will be charged to my account? If you have opted out of courtesy pay for only debit and ATM (and not opted out of courtesy pay for ALL transactions), we will continue to cover your checks whenever possible.
15. Am I allowed to set my overdraft limit or does the credit union set that for me? FCCU establishes a limit to facilitate our courtesy pay program. You can choose to Opt In or Out of the service. You may also set up transfers from savings accounts or a line-of-credit as an option.
16. How does this affect my business checking account? It doesn’t. Regulation E is a consumer regulation and doesn’t apply to businesses.
17. I shop at Publix every Saturday – is that a recurring transaction? Whether a transaction is considered recurring or not is determined by a code placed on the transaction by the merchant. Publix would not code a grocery purchase as a recurring transaction.
18. I never use the courtesy pay privileges you give me now – do I really need to Opt-In? The benefit of opting in is that in the off chance that your balance isn’t sufficient to authorize a debit card or ATM transaction, we’ll still usually pay it. This is the way your account is set up today. If, on the other hand, you want us to always decline a debit card or ATM transaction, even if you are at the gas pump or grocery store check-out line, you should choose to opt-out.
19. I don’t have a debit card with my account – do I really need to sign this form? For many of our members (who have chosen not to have a debit card) was the fear of overdrawing their account inadvertently with a debit card transaction. With the changes to the regulation, you can enjoy the benefit of a debit card while opting out of courtesy pay privileges for debit and ATM transactions. Without a debit card, there is really no impact to your opting in or out. If you do nothing, we’re required to assume you have opted out. If you opt in now, and decide to use a debit card in the future, you’ll automatically receive the courtesy pay privileges at that time for your debit card and ATM transactions.
20. I have two checking accounts – one with a courtesy pay limit and one without a limit – what are the effects of Opting In vs. Opting Out? For the account with a courtesy pay limit, opting in will assure you that your account will continue to operate as it does today. Opting out will result in debit and ATM transactions being denied if you have insufficient funds available to cover the authorization. For the account without a courtesy pay limit, opting in will assure you that your account continues to function as it does today. Opting out will stop NSF fees caused by overdrafts for debit and ATM transactions (you could be charged an NSF fee for other types of transactions). However, if you ever switch your courtesy pay privileges to this account, you’ll have to let us know if you want to opt in to receive courtesy pay privileges for all transaction types.
21. Do I have to decide again when my card expires and new ones arrive in the mail? No
22. Does it matter how I use my card – debit vs credit; signature vs PIN? The amendments to the regulation apply to both equally. However, some merchants treat the transaction differently – attempting to place an authorization hold on for different amounts depending on whether you use the card as debit or credit (sign vs use your PIN). You would need to ask specific merchants for their policies surrounding this.
23. If I Opt Out, will I still have overdraft protection from my savings account and revolving Line Of Credit? Yes, you will. Transfer fees from savings accounts will still apply.
24. Can I have debit card and ATM transactions declined for my spouse’s debit card when we don’t have the money, but authorize transactions for my debit card? The OPT-IN or OPT-OUT decision is for the account as a whole, not for the individual cards.