Fed's Overdraft Reg Very Close to Proposal

ARLINGTON, Va. – When the NCUA finally releases its regulations on overdraft protection programs, there is a pretty good chance they may be a bit more flexible than those the Federal Reserve first proposed. The Federal Reserve's final regulation addressing overdraft protection programs appears to be fairly close to the regulator's previously proposed regulation but does not appear to cover quite as many programs as the Fed's initial regulation did, according to Gwen Baker, NAFCU's director for regulatory affairs. “It would appear that the final regulation is a little bit more flexible than the proposed version,” Baker said, “because it appears that some of the previously discussed overdraft disclosures will not apply to institutions that do not advertise their overdraft protection programs.” The proposed regulation requirements would have covered all overdraft protection programs whether the institutions advertise them or not. The Fed also restated its previous note that it had not yet decided whether overdraft protection programs also need regulations under the truth in lending rules. Currently the regulations appear under the rule for truth in savings.