Regulation E Policy

What's all the hype about Regulation E?
You may have heard about changes banks have made to their overdraft policies and fees to comply with new federal regulation changes. Debate about regulations and congressional acts can be overwhelming and all you want to know is, "How does this affect me and my MAX account?" So, we are going to tell you - plain and simple.

What is the federal Regulation E Policy?
Regulation E is also known as the Electronic Funds Transfer Act. This policy provides guidelines for fees that financial institutions may charge when members overdraw on their accounts when performing electronic transactions such as debit, credit or ATM transactions.

"Regulation E provides a basic framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer's account (such as direct deposit and social security payments). The term "electronic fund transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's asset account." Federal Reserve Board.

What is changing about this policy?
The new policy only allows financial institutions to charge fees on ATM and debit card transaction overdrafts if a customer opts-in to permit the bank or credit union to allow overdrafts on their accounts. In other words, customers must authorize their bank or credit union to show a negative balance and charge a fee for allowing ATM or debit card transactions to "go through" when there is not enough money in the account to cover that transaction.

Why haven't I received a new Regulation E policy for MAX?
MAX did not need to update its policy because the current procedures were already in line with the Federal Reserve's new regulations. MAX's policies were created to protect you from being charged unnecessary fees. The Federal Reserve made these new Reg E policy requirements for consumers' protection, but MAX was one step ahead by already having such policies in place.

What is MAX's Regulation E policy?
MAX's complete Regulation E policy is available in PDF format. Visit the Disclosures page to download a copy.


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