DRAFT

FEDERAL RESERVE SYSTEM

12 CFR Part 230 

Regulation DD; Docket No. R-1315

Truth in Savings

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; official staff commentary.

SUMMARY: The Federal Reserve Board (Board) is amending Regulation DD, which 

implements the Truth in Savings Act, and the official staff commentary to the regulation

to require all depository institutions to disclose aggregate overdraft fees on periodic 

statements, and not solely institutions that promote the payment of overdrafts. The final 

rule also addresses balance disclosures provided to consumers through automated 

systems. In addition, the Board is separately issuing a proposed rulemaking, published in 

today’s Federal Register, to incorporate the notice requirements into Regulation E that 

were previously proposed under Regulation DD. 

EFFECTIVE DATE: The rule is effective January 1, 2010.

FOR FURTHER INFORMATION CONTACT: Dana E. Miller, Attorney, or Ky 

Tran-Trong, Counsel, Division of Consumer and Community Affairs, Board of 

Governors of the Federal Reserve System, Washington, D.C. 20551, at (202) 452-3667. 

For users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-

4869.
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SUPPLEMENTARY INFORMATION: 

I. The Truth in Savings Act

The Truth in Savings Act (TISA), 12 U.S.C. 4301 et seq., is implemented by the 

Board’s Regulation DD (12 CFR part 230). The purpose of the act and regulation is to 

assist consumers in comparing deposit accounts offered by depository institutions, 

principally through the disclosure of fees, the annual percentage yield, the interest rate, 

and other account terms. An official staff commentary interprets the requirements of 

Regulation DD (12 CFR part 230 (Supp. I)). Credit unions are governed by a 

substantially similar regulation issued by the National Credit Union Administration 

(NCUA). 

The Board’s authority under Section 269(a) of TISA provides that its regulations 

may contain such classifications, differentiations, or other provisions, and may provide 

for such adjustments and exceptions for any class of accounts as, in the judgment of the 

Board, are necessary or proper to carry out the purposes of TISA, to prevent 

circumvention or evasion of the requirements of TISA, or to facilitate compliance with 

the requirements of TISA. 12 U.S.C. 4308. It is the purpose of TISA to require the clear 

and uniform disclosure of the fees that are assessable against deposit accounts, so that 

consumers can make a meaningful comparison between the competing claims of 

depository institutions with regard to deposit accounts. 12 U.S.C. 4301.

In addition, under TISA and Regulation DD, account disclosures must be 

provided upon a consumer’s request and before an account is opened. Institutions are not 

required to provide periodic statements; but if they do, the act requires that fees, yields, 

and other information be provided on the statements. 
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TISA and Regulation DD contain rules for advertising deposit accounts. TISA

and Regulation DD prohibit inaccurate or misleading advertisements, announcements, or 

solicitations, or those that misrepresent the deposit contract. TISA and Regulation DD 

also prohibit institutions from advertising an account as free (or using words of similar 

meaning) if a regular service or transaction fee is imposed, if a minimum balance must be 

maintained, or if a fee is imposed when a customer exceeds a specified number of 

transactions. 

II. Background on Overdraft Services and Regulatory Action to Date

Historically, if a consumer attempted to engage in a transaction that would 

overdraw his or her deposit account, the consumer’s depository institution used its 

discretion on an ad hoc basis to determine whether to pay the overdraft. If an overdraft 

was paid, the institution usually imposed a fee on the consumer’s account.1

Overdraft services vary among institutions but often share certain common 

characteristics. In general, consumers who meet the institution’s criteria are 

automatically enrolled in overdraft services.

 In recent 

years, many institutions have largely automated the overdraft payment process. 

Automation is used to set specific criteria for determining whether to honor overdrafts 

and set limits on the amount of the coverage provided. 

2

 1 The Board recognized this longstanding practice when it initially adopted Regulation Z in 1969 to 

implement the Truth in Lending Act (TILA). The regulation provided that these transactions are generally 

not covered under Regulation Z where there is no written agreement between the consumer and institution 

to pay an overdraft and impose a fee. See 12 CFR § 226.4(c)(3). The treatment of overdrafts in Regulation 

Z was designed to facilitate depository institutions’ ability to accommodate consumers’ transactions on an 

ad hoc basis. 2 These criteria may include whether the account has been open a certain number of days, whether the 

account is in “good standing,” and whether deposits are regularly made to the account.

 While institutions generally do not initially 

underwrite on an individual account basis when enrolling a consumer in the service, most 

institutions will review individual accounts periodically to determine whether the 
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consumer continues to qualify for the service, and the amounts that may be covered. 

Most institutions disclose to consumers that the payment of overdrafts is discretionary, 

and that the institution has no legal obligation to pay any overdraft.

In the past, institutions generally provided overdraft coverage only for check 

transactions.3

 In recent years, however, the service has been extended to cover overdrafts 

resulting from non-check transactions, including withdrawals at automated teller 

machines (ATMs), automated clearinghouse transactions, debit card transactions at pointof-sale, pre-authorized automatic debits from a consumer’s account, telephone-initiated 

funds transfers, and online banking transactions.4

The Board, Federal Deposit Insurance Corporation (FDIC), NCUA and Office of 

the Comptroller of the Currency published guidance on overdraft protection programs in 

February 2005 (Joint Guidance) in response to concerns about aspects of the growing 

marketing, disclosure, and implementation of overdraft services. The Joint Guidance 

addressed three primary areas – safety and soundness considerations, legal risks, and best 

 

A flat fee is charged each time an overdraft is paid, regardless of the amount of 

the overdraft. Institutions commonly charge the same amount for paying the overdraft as 

they would if they returned the item unpaid. A daily fee also may apply for each day the 

account remains overdrawn.

 3 According to the FDIC’s Study of Bank Overdraft Programs, nearly 70 percent of banks surveyed 

implemented their automated overdraft program after 2001. In addition, 81 percent of banks surveyed that 

operate automated programs allow overdrafts to be paid at ATMs and POS debit card terminals. See FDIC 

Study of Bank Overdraft Programs 8, 10 (November 2008) (available at: 

http://www.fdic.gov/bank/analytical/overdraft/FDIC138_Report_FinalTOC.pdf) (FDIC Study). See also

Overdraft Protection: Fair Practices for Consumers: Hearing before the House Subcomm. on Financial 

Institutions and Consumer Credit, House Comm. on Financial Services, 110th Cong., at 72 (2007) 

(hereinafter, Overdraft Protection Hearing) (available at 

http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr0705072.shtml) (stating that as recently as 

2004, 80 percent of banks still declined ATM and debit card transactions without charging a fee when 

account holders did not have sufficient funds in their account).

4 See Interagency Guidance on Overdraft Protection Programs, 70 FR 9127, Feb. 24, 2005, and OTS 

Guidance on Overdraft Protection Programs, 70 FR 8428, Feb. 18, 2005.
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practices. The Office of Thrift Supervision (OTS) published similar guidance which 

focused on safety and soundness considerations and best practices (OTS Guidance). The 

best practices described in the Joint Guidance and the OTS Guidance focused on the 

marketing of overdraft services and the disclosure and operation of program features, 

including distinguishing actual available account balances from account balances that 

include overdraft protection amounts.

In May 2005, the Board separately published revisions to Regulation DD and the 

official staff commentary to address concerns about the uniformity and adequacy of 

institutions’ disclosure of overdraft fees generally, and the advertisement of overdraft 

services in particular. 70 FR 29582, May 24, 2005.5

 5 A substantively similar rule applying to credit unions was issued separately by the NCUA. 71 FR 24568, 

Apr. 26, 2006. 

 Under the May 2005 final rule, 

which became effective July 1, 2006, all depository institutions were required to specify 

in their account disclosures the categories of transactions for which an overdraft fee may 

be imposed. Depository institutions that promote the payment of overdrafts in an 

advertisement were required to include in such advertisements certain information about 

the costs associated with the service and the circumstances under which the institution 

would not pay an overdraft. These institutions were also required to disclose separately 

on their periodic statements the total amount of fees or charges imposed on the account 

for paying overdrafts and the total amount of fees charged for returning items unpaid. 

These disclosures were required to be provided for the statement period and for the 

calendar year-to-date.
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III. The Board’s Proposed Revisions to Regulation DD

In May 2008, the Board issued two proposals relating to overdraft services. 

These proposals were intended to address concerns that consumers may not adequately 

understand the costs of overdraft services or how overdraft services operate generally. 

The Board, along with the OTS and the NCUA, proposed to adopt substantive protections 

using their authority under the Federal Trade Commission Act (FTC Act).

6

Pursuant to its authority under Sections 263, 264, 268 and 269(a) of TISA,

 The Board 

also separately proposed to add a new Subpart D on overdraft services to the Board’s 

Regulation AA, Unfair or Deceptive Acts or Practices (FTC Act Proposal) (12 CFR part 

227). Among other provisions, the proposed rules would require institutions to provide 

consumers the right to opt out of their institutions’ payment of overdrafts. 

7 the 

Board also proposed new disclosure requirements under Regulation DD to facilitate 

consumers’ ability to make informed judgments about the use of their accounts.8

 6 73 FR 28904, May 19, 2008. For simplicity, this notice will refer only to the Board’s proposal. 

7 12 U.S.C. 4302(e), 4303(b) & (d), 4307, 4308(a). While the NCUA did not separately propose

amendments to its 12 CFR part 707 in May 2008, TISA requires the NCUA to promulgate regulations 

substantially similar to Regulation DD. Accordingly, the NCUA anticipates issuing proposed amendments 

to part 707 shortly after the Board’s adoption of final rules under Regulation DD. 8 73 FR 28739, May 19, 2008.

 The 

proposed revisions to Regulation DD addressed three types of overdraft disclosures. 

First, the Board proposed to revise § 230.10 to establish format, content, and timing 

requirements for the notices given to consumers by their depository institution informing 

them about their right to opt out of their institution’s overdraft service. The proposal 

included a model opt-out form. Second, the Board proposed to extend to all institutions 

the requirement to disclose on periodic statements the aggregate dollar amounts charged 

for overdraft fees and for returned-item fees (for the statement period and the year-todate). Currently, Regulation DD requires that only institutions that promote or advertise 
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the payment of overdrafts must disclose aggregate amounts. Third, the Board proposed 

to require institutions that provide account balance information through an automated 

system to disclose the amount of funds available for the consumer’s immediate use or 

withdrawal, without including additional funds the institution may provide to cover 

overdrafts. Under the proposal, institutions would be permitted to disclose a second 

account balance that includes funds available for paying overdrafts, provided the 

institution prominently discloses at the same time that this balance includes additional 

funds provided by the institution to cover overdrafts.

Overview of public comments

The Board received over 600 comments on the Regulation DD proposal. 

Additionally, a number of comments submitted in connection with the FTC Act Proposal 

contained comments on the Regulation DD proposal. Commenters included individual 

consumers, consumer advocates, federal and state regulators and officials, large financial 

institutions, credit unions, community banks, industry trade associations, members of 

Congress, core systems providers, and vendors of overdraft services. 

Most commenters focused on the proposed model opt-out form.9

 9 Comments that addressed the merits of the substantive opt-out right were provided in response to the May

2008 FTC Act Proposal. Many industry commenters argued that the substantive opt-out right should be 

addressed under Regulation E. These commenters argued that consumers prefer to have their checks paid 

and an overdraft fee assessed rather than face possible negative consequences resulting from a bounced 

check. 

 Consumer 

groups supported the proposed model form for notifying consumers of their right to opt 

out of overdraft services, but urged the Board to enhance the model form in various ways, 

including making the opt-out right more prominent. Most industry commenters stated

that the proposed model form was unduly biased towards encouraging consumers to opt 

out and did not sufficiently explain that payment of overdrafts is discretionary. These 
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commenters maintained that the model form could mislead consumers into believing that 

overdrafts will be paid in all cases.

Consumers and consumer groups supported extending the aggregate overdraft fee 

disclosures on periodic statements to all financial institutions. These commenters 

maintained that streamlined disclosures will ensure that consumers fully understand the 

consequences of overdrawing their account. However, most industry commenters 

objected to extending the aggregate fee disclosures to all institutions, stating the burden 

would outweigh the limited benefits of the disclosure. 

Consumer groups also supported the proposed requirement that institutions 

disclose account balance information without including any overdraft funds provided by 

the institution. Consumer groups urged the Board to apply the same requirement to 

balance information provided in person, by telephone or e-mail, or in Internet “chats”

with bank personnel. Some consumer groups argued that institutions also should be 

prohibited from disclosing a second balance that includes these overdraft funds because it 

could mislead consumers. Industry response to the balance disclosure proposal was 

mixed; of those commenters that supported the proposal, some argued that it should only 

apply to proprietary ATMs. Other industry commenters requested the rule be revised to 

clarify what funds must be excluded from the balance (and from any second balance that 

might be disclosed).

Subsequent to the issuance of the Regulation DD proposal, the Board used a 

testing consultant, Macro International, Inc. (Macro), to conduct qualitative consumer 

testing to assess consumer understanding of the model form. Macro also conducted 

qualitative consumer testing of various model opt-out language and aggregate fee tables. 
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Except where relevant to this final rule, the testing results are discussed in the final FTC 

Act rule and the Board’s Regulation E proposal, where appropriate. These rulemakings 

are published elsewhere in today’s Federal Register.

IV. Summary of the Final Rule

The following is a summary of the significant revisions to the regulation and the 

official staff commentary. The revisions are discussed in more detail below in the

section-by-section analysis.

The Board is adopting final revisions to Regulation DD and the official staff 

commentary to expand the requirement to disclose overdraft fees on periodic statements 

to apply to all institutions, and not solely to institutions that promote the payment of 

overdrafts. The final rule adds format requirements to help make the aggregate fee 

disclosures more effective and noticeable to consumers. 

In addition, the final rule requires an account balance disclosed to a consumer 

through any automated system (including, but not limited to, an ATM, Internet website, 

or telephone response system) to exclude additional amounts that the institution may 

provide or that may be transferred from another account of the consumer to cover an item 

where there are insufficient or unavailable funds in the consumer’s account. The rule is 

designed to ensure that consumers are not confused or misled about the available amount 

of funds in their account when they request their account balance. The final rule permits 

the institution to disclose an additional balance that includes funds provided pursuant to a 

discretionary overdraft service or a line of credit, or funds that could be transferred from 

a consumer’s linked individual or joint account, so long as the institution prominently 

states that the balance includes these additional amounts.
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Based on the Board’s review of comments received and consumer testing results, 

the Board believes it is appropriate to place opt-out requirements under the Board’s 

authority under the Electronic Fund Transfer Act and Regulation E.10 Thus, a revised 

substantive opt-out is set forth in a proposal under Regulation E. The Regulation E 

proposal also proposes, in the alternative, to require institutions to provide customers an 

opt-in to payment of overdrafts for ATM and debit transactions, and includes a proposed 

model opt-in notice. The Regulation E proposal would also incorporate the content and 

timing requirements for consumer opt-out (and opt-in) notices. The new proposed model 

forms have been modified to conform to the revised substantive opt-out right, and reflect 

consumer testing results and commenter suggestions.

V. Section-by-Section Analysis

Section 230.11 Additional Disclosure Requirements Regarding Overdraft Services

11(a) Disclosure of Total Fees on Periodic Statements

Although periodic statements are not required under TISA, institutions that 

provide such statements are required to disclose fees or charges imposed on the account 

during the statement period. 

Applicability of aggregate fee disclosures

See

 10 These comments and the testing results are more fully discussed in the final FTC Act rule and the 

Board’s Regulation E proposal published elsewhere in today’s Federal Register, where appropriate.

12 U.S.C. 4307(3) and 12 CFR § 230.6(a)(3). Further, 

§ 230.11(a) of Regulation DD requires institutions that promote the payment of 

overdrafts in an advertisement to provide on periodic statements the aggregate dollar 

amount totals for overdraft fees and for returned item fees, both for the statement period 

as well as for the calendar year-to-date. Pursuant to its authority under Sections 268 and 

269 of TISA, the Board proposed to expand § 230.11(a) to require all institutions, 
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regardless of whether they promote the payment of overdrafts, to disclose the aggregate 

fee information. The revision was intended to provide all consumers that use 

discretionary overdraft services, consistent with the purposes of TISA, with additional 

information about fees to help them better understand the costs associated with their 

accounts. The proposed rule also added format requirements to help make the aggregate 

fee disclosures more effective and noticeable to consumers. The final rule generally 

adopts the proposal, with certain clarifications to reflect the expanded scope of the rule. 

The final rule deletes as unnecessary certain of the examples in existing § 230.11(a)(2) of 

communications that would not trigger the aggregate fee disclosure requirement. As 

under the current rule, institutions must provide these totals for both the statement period 

and the calendar year-to-date. See § 230.11(a)(2). In addition, the Board is adopting, 

generally as proposed, commentary clarifying that the aggregate fee total does not 

include fees for transferring funds from another account of the consumer to avoid an 

overdraft, or fees charged under a service subject to the Board’s Regulation Z (12 CFR 

part 226). See

Consumers and consumer groups supported extending the aggregate overdraft fee 

disclosures on periodic statements to all financial institutions because, in their view, most 

institutions systematically cover overdrafts whether they promote the service or not. 

These commenters asserted that consistent disclosures will ensure that consumers fully 

understand the consequences of overdrawing their account. These commenters stated 

that the aggregate fee disclosures would help consumers to better manage their bank 

accounts and to understand the total costs they have incurred over time. In addition, 

comment 11(a)(1)-2. 
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these commenters believed that the aggregate disclosures may encourage consumers to 

explore other potentially lower-cost alternatives that may be available to them. 

In contrast, most industry commenters objected to extending the aggregate fee 

disclosures to all institutions. These commenters stated that revisions to periodic 

statements would be costly and would require extensive and time-consuming 

programming changes. Industry commenters also argued that the burden would outweigh 

the limited benefits of the disclosure; some argued that aggregate fee information would 

benefit only a limited number of consumers who incur substantial fees. 

The final rule is intended to provide all consumers who use discretionary 

overdraft services with additional information to help them better understand the 

overdraft and NSF (returned item) costs associated with their accounts. The aggregate 

fee disclosures will benefit those consumers who overdraw their accounts with some 

frequency but who do not currently receive aggregate fee disclosures because their 

institution does not promote its overdraft service. 

In addition, the Board believes the final rule will promote greater transparency 

about the terms and costs of overdraft services for all institutions. Under the current rule, 

institutions that do not promote their overdraft service may be reluctant to provide 

information about the service out of concern that such disclosures might trigger the 

aggregate fee disclosure requirements. The Board also believes the rule will create 

consistency in disclosures and will eliminate compliance challenges inherent in a 

regulatory scheme based on a “promoting” or “marketing” distinction. 

Several industry commenters argued that overdraft fees are already disclosed in 

the deposit agreement or fee schedule, and questioned why these types of fees deserve 
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special attention on the statement compared to other types of account fees. Others argued 

that consumers already receive itemized fees on their periodic statements. Some industry 

commenters argued that the emphasis on overdraft and returned item fees would detract 

from other account charges.

The Board believes this requirement is appropriate because overdraft and returned 

item fees are not as predictable as many other types of account fees. Consumers cannot 

always know when settlement on any one item will occur (particularly relative to other 

transactions, where an institution processes items using different methods). Also, balance 

inquiries may not always contain real-time balance information; therefore, consumers 

may not realize that one overdrawn item could trigger overdrafts on other transactions, 

and thus may not be able to predict the total fees that will be charged for any one 

overdraft occurrence. When there are multiple overdrafts, fee amounts may be 

significant, even though each item may represent a relatively small dollar amount.11 In 

addition, a small segment of consumers incur the majority of overdraft fees.12

 11 Eric Halperin, Lisa James & Peter Smith, Debit Card Danger, Ctr. For Responsible Lending at 25 

(consumers pay $1.94 in fees for every one dollar borrowed to cover a debit card POS overdraft). The 

FDIC’s Study of Bank Overdraft Programs found that the median overdraft amount for debit card 

overdrafts was $20, and the median overdraft amount for ATM transactions was $60. FDIC Study of Bank 

Overdraft Programs 79 (Nov. 2008), available at: 

http://www.fdic.gov/bank/analytical/overdraft/FDIC138_Report_FinalTOC.pdf. Overdraft fees have 

increased significantly over the last decade. See Federal Reserve Bulletin, Retail Fees of Depository 

Institutions, 1997-2001, 405, 409, available at: 

http://www.federalreserve.gov/pubs/bulletin/2002/0902lead.pdf (average overdraft fee in 1997: $16.51); 

Bankrate, 2007 Courtesy Overdraft Study, available at: 

http://www.bankrate.com/brm/news/chk/20071219_overdraft_survey_main_a1.asp (average overdraft fee 

in 2007: $29). See also Bank Fees: Federal Banking Regulators Could Better Ensure that Consumers Have 

Required Disclosure Documents Prior to Opening Checking or Savings Accounts, GAO Report 08-281 

(January 2008) (11% increase from 2000 to 2007, according to one estimate).

12 See, e.g., Jacqueline Duby, Eric Halperin & Lisa James, High Cost and Hidden From View: The $10 

Billion Overdraft Loan Market, Ctr. For Responsible Lending (May 26, 2005). 

 The 

aggregate fee disclosures will benefit these consumers by showing them the total 
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expenditures on overdraft fees for the statement period and year, which may encourage 

them to explore alternatives that might be less costly. 

A few industry commenters requested that, in lieu of a year-to-date fee total, the 

Board permit a rolling twelve-statement-cycle total, because the latter would be more 

useful for consumers. However, consumer testing on both credit card and overdraft 

disclosures indicated that consumers noticed year-to-date cost figures, and that they 

would find the numbers helpful in making financial decisions. The Board further notes 

that some consumers are already receiving year-to-date totals from institutions currently 

subject to the rule; thus, requiring year-to-date disclosures for all institutions will 

promote consistency of disclosure across institutions. The Board is also adopting, 

elsewhere in today’s Federal Register, requirements to disclose year-to-date interest 

charges and fees under Regulation Z. Consistency among the various consumer 

disclosure regulations should facilitate consumer understanding of disclosures. Thus, the 

final rule requires totals for both the statement period and the calendar year-to-date. See

Several industry commenters asked whether an institution must provide an 

aggregate fee disclosure if the consumer has not been charged an overdraft or returned 

item fee for the year-to-date. Section 230.11(a)(1) states that a depository institution 

must separately make the fee disclosures on each periodic statement, 

§ 230.11(a)(2). 

as applicable

(emphasis added). Thus, if a consumer has not incurred fees since the beginning of the 

year (or statement period), the institution is not required to provide a “$0” aggregate total

for the year-to-date (or statement period). However, institutions may, at their option, 
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provide aggregate fee disclosures even if a consumer has not been charged fees since the 

beginning of the year or for a particular statement period. 

Because the final rule expands the applicability of the aggregate fee disclosures to 

all financial institutions, certain existing staff comments addressing institutions that 

promote overdraft services require modification or are no longer applicable. Thus, 

comment 11(a)(3)-1 has been revised, and comment 11(a)(5)-1 has been deleted.

Pursuant to the Board’s authority under TISA Section 269, the final rule also adds

proximity and format requirements which are intended to enhance the effectiveness of the 

disclosures and to make them more noticeable to consumers. Board staff reviewed 

current periodic statement disclosures for institutions that promote overdraft services. 

This review indicated that the aggregate fee totals are often disclosed in a manner that 

may not be effective in informing consumers of the totals.

Format of aggregate fee disclosures

13 Accordingly, proposed 

§ 230.11(a)(3) stated that aggregate fee disclosures must be provided in close proximity 

to the fees identified under § 230.6(a)(3). For example, the aggregate fee totals could 

appear immediately after the transaction history on the periodic statement reflecting the 

fees that have been imposed on the account during the statement period. The proposed 

rule also provided that the information must be presented in a tabular format similar to 

the proposed interest charge and total fees disclosures under the Board’s June 2007 

proposal under Regulation Z. See

 13 For example, several statements contained inconsistent formatting, or fee totals were included at the end 

of the statement and not highlighted in a manner noticeable to consumers.

72 FR at 32996, 33052. The proposal requested 

comment on two alternatives of Sample Form B-11, which illustrates how institutions 

should provide the aggregate cost information on their periodic statements.
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Consumer groups supported the proposed proximity and formatting requirements. 

These commenters maintained that the requirement to place the aggregate fee disclosures 

in close proximity to the transaction history would better enable consumers to understand

how their current account activity may have contributed to a history of overdrafts. They 

also supported the proposed tabular format. 

Industry commenters, however, objected to the proximity and fee table 

requirement. They argued that it would require extensive, costly systems changes to 

provide a fee table in close proximity to the transaction history. Some industry 

commenters also argued that a proximity requirement is subjective and subject to 

litigation risk.

As described above, Board staff’s review of current periodic statement disclosures 

for institutions that promote overdraft services showed that in some cases, fee tables were 

not placed in a location noticeable to consumers. Thus, the Board believes that uniform 

proximity requirements are necessary to enable consumers to easily find fee information 

so that, consistent with the purposes of TISA, they better understand the costs of using 

the service. The proposed proximity and format requirements were informed by the 

Board’s consumer testing undertaken in the context of credit card disclosure requirements 

under Regulation Z. In that testing, consumers reviewing transactions identified on their 

periodic statements consistently noticed totals for fees and interest charges when they 

were grouped together with transactions. See 72 FR at 32996. Additional consumer 

testing was conducted subsequent to the May 2008 proposal on overdraft fee disclosures 

and confirmed that aggregate cost disclosures for overdraft and returned item fees were
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more noticeable to consumers when grouped together with the itemized fees.

14 Further, 

the testing indicated that consumers tend to notice fee disclosures when expressed in 

tabular form. Consumer testing on the two proposed tabular format alternatives 

demonstrated that the first alternative, a clear graphic disclosure, was the preferred 

alternative. Consumers found it easiest to identify and digest the relevant fees in a 

column and row format. Thus, the Board is adopting the first proposed alternative, 

renumbered as Sample Form B-10, to illustrate how an institution should provide the 

aggregate cost data. Aggregate fee disclosures must be provided using a format 

substantially similar to Sample Form B-10. See

Despite their general support of the aggregate fee disclosures, consumer groups 

nonetheless urged the Board to find that overdraft services are credit under Regulation Z 

so that consumers would be provided disclosures containing an effective APR figure. 

The Board believes that requiring an effective APR is not necessary to alert consumers to

the costs of the service. Moreover, the Board believes the proposed aggregate fee table 

will be of more value than an effective APR in the overdraft context. Consumer testing 

in the credit card context showed that consumers preferred seeing costs reflected as 

amount totals rather than expressed as an effective APR.

§ 230(11)(a)(3).

15

Several industry commenters requested that the Board permit some flexibility in 

the language used in the aggregate fee table for the total returned item fees, because their 

customers are more familiar with language such as “NSF fee” rather than “returned item 

fee.” The Board has revised comment 11(a)(1)-3 to clarify that institutions may use 

 

 14 See Review and Testing of Overdraft Notices, Macro International, December 8, 2008. 15 For this reason, the Board is revising Regulation Z to replace the disclosure of the effective APR with a 

tabular disclosure of the proposed interest charge and total fees.
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terminology such as “returned item fee” or “NSF fee” to describe the fees for returning 

items unpaid. 

Several industry commenters also requested clarification on how to display fees 

that have been refunded. Comment 11(a)(1)-6, which has been redesignated as comment 

11(a)(1)-4 in the final rule, addresses this issue where an institution provides a statement 

for the current period reflecting that fees imposed during a previous period were waived 

and credited to the account. This comment provides that, in these circumstances, 

institutions may, but are not required to, reflect the adjustment in the total for the 

calendar year-to-date and in the applicable statement period. For example, if an 

institution assesses a fee in January and refunds the fee in February, the institution could 

disclose a year-to-date total reflecting the amount credited, but it should not affect the 

total disclosed for the February statement period, because the fee was not assessed in the 

February statement period. However, because some institutions may assess and then 

waive and credit a fee within the same statement cycle, the comment has been revised to 

clarify that, in such a case, the institution may reflect the adjustment in the total disclosed 

for fees imposed during the current statement period and for the total for the calendar 

year-to-date. In this case, if the institution assesses and waives the fee in February, the 

February fee total could reflect a total net of the waived fee.

Section 230.11(b)(2) lists the types of communications about the payment of 

overdrafts that are not subject to additional advertising disclosures under § 230.11(b)(1). 

The final rule expands the list in § 230.11(b)(2) to include an opt-out or opt-in notice 

11(b) Advertising disclosures for overdraft services
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regarding the institution’s payment of overdrafts or provision of discretionary overdraft 

services. See § 230.11(b)(2)(xii). 

Section 230.11(b)(1) currently requires institutions that promote the payment of 

overdrafts to include certain disclosures in their advertisements about the service to avoid 

confusion between overdraft services and traditional lines of credit. The May 2005 final 

rule provided examples of institutions promoting the payment of overdrafts in the staff 

commentary.

11(c) Disclosure of account balances

16 In particular, the commentary stated that an institution must include the 

additional advertising disclosures if it “discloses an overdraft limit or includes the dollar 

amount of an overdraft limit in a balance disclosed on an automated system, such as a 

telephone response machine, ATM screen or the institution’s Internet site.”17

 16 See comment 11(b)-1. 17 Comment 11(b)-1.iii.

 To 

facilitate responsible use of overdraft services and ensure that consumers receive accurate 

information about their account balances, the May 2008 Regulation DD Proposal would

have prohibited institutions from including funds the institution may provide to cover an 

overdraft item in a consumer’s account balance disclosed through any automated system 

in response to a balance inquiry. The proposal would have permitted an institution to 

disclose a second balance that includes these additional funds, if the institution 

prominently indicates these funds are included. The rule as adopted has been revised to 

clarify that the balance disclosed may not include any funds the institution may provide 

to cover an overdraft, funds that will be paid by the institution under a service subject to 

the Board’s Regulation Z (12 CFR part 226), or funds transferred from another account 

of the consumer. The final rule permits an institution to disclose another balance that 
- 20 -

includes these additional funds, so long as the institution prominently states that the 

balance includes such funds.

Industry response to the proposal was mixed. Some supported the rule as 

proposed; for example, one national community bank trade association stated that a 

common consumer complaint has been misunderstanding whether an account has 

sufficient funds to cover a transaction. This commenter believed that requiring the bank 

to disclose the available balance would help avoid customer confusion. Others argued for 

limiting the scope of coverage to balances provided at proprietary ATMs; some opposed 

the rule altogether as too burdensome. Some commenters requested that the rule be 

revised to clarify what funds must be excluded from the balance.

Consumer groups supported the proposed rule as a significant protection for 

consumers. These commenters argued that disclosing a balance without overdraft funds 

provided by the institution would equip consumers with the knowledge necessary to 

make informed financial decisions. However, these commenters urged the Board to 

apply the same requirement to balance information provided during communications with 

bank personnel. Some consumer groups also urged the Board to prohibit financial 

institutions from disclosing a second account balance. 

The Board is adopting a revised rule, pursuant to its authority in TISA 

section 263(e) to prohibit misleading or inaccurate advertisements, announcements, or 

solicitations relating to a deposit account. Under § 230.11(c) of the final rule, if an 

institution discloses balance information through an automated system, it must disclose 

an account balance that excludes funds that the institution may provide to cover an 

overdraft in its discretion, funds that will be paid by the institution under a service subject 
- 21 -

to the Board’s Regulation Z (12 CFR part 226), or funds transferred from another account 

of the consumer. For example, although an institution may add a $500 cushion to the 

consumer’s account balance when determining whether to pay an overdrawn item, under 

the final rule, the additional $500 could not be included in the balance provided to the 

consumer through an automated system. 

The proposed rule covered account balances disclosed in response to a 

consumer’s inquiry. However, balances may also be disclosed to the consumer even if 

the consumer has not specifically requested a balance. For example, if a consumer 

withdraws funds at an ATM from his or her checking account, the receipt for that 

transaction may also include the consumer’s account balance. Or, a consumer may 

receive an account balance when requesting a transaction history online. The Board 

believes the requirement to provide a balance not supplemented by overdraft funds 

should apply equally in these circumstances to ensure consumers are given an accurate 

account balance. Thus, the final rule deletes the reference to the consumer’s inquiry. 

Several industry commenters argued that the reference in proposed § 230.11(c) to 

“funds that are available for the consumer’s immediate use or withdrawal” is superfluous 

and adds unnecessary complexity to the rule. They contended that this language could 

lead to litigation over what is actually “available.” Some commenters suggested that, to 

provide greater certainty, the rule should focus on the funds that must be excluded from 

the balance, rather than on the funds that should be included. The proposed language was 

intended to provide clarity that institutions should not provide a balance including 

overdraft funds, so that a consumer receives an accurate disclosure of his or her balance 

Funds included in and excluded from balance
- 22 -

to help the consumer better manage his or her account. The rule was not intended to 

define what funds are available pursuant to Regulation CC. Accordingly, to avoid any 

ambiguity, § 230.11(c) has been revised to delete the language “funds that are available 

for the consumer’s immediate use or withdrawal.” As discussed below, the final rule 

does not require disclosures of real-time balances nor otherwise affect what funds an 

institution considers to be available. 

Several other industry commenters requested clarification as to whether 

institutions may include in the balance disclosure amounts available under a consumer’s 

overdraft line of credit with the institution, and how to treat funds from a linked account 

(such as a savings account). As described above, the rule was intended to give 

consumers an accurate idea of their balance. The Board is concerned that permitting a 

balance to include funds available under a consumer’s overdraft line of credit or through 

a transfer from a consumer’s savings or other linked account would cause consumer 

confusion—comparable to the inclusion of an overdraft cushion—as to the amount a 

consumer may withdraw or spend without incurring an overdraft. Thus, § 230.11(c) has 

been revised to clarify that an institution must disclose a balance that does not include 

additional amounts that the institution may provide in its discretion to cover an overdraft, 

funds that will be paid by the institution under a service subject to the Board’s Regulation 

Z (12 CFR part 226), or funds transferred from another account of the consumer.

Proposed comment 11(c)-1 clarified that the institution may, but need not, include

in the balance funds that are deposited in the consumer’s account, such as from a check, 

but that are not yet made available for withdrawal in accordance with the funds 

availability rules under the Board’s Regulation CC (12 CFR part 229). Similarly, the 
- 23 -

comment stated that the balance may, but need not, include any funds that are held by the 

bank to satisfy a prior obligation of the consumer (for example, to cover a hold for an 

ATM or debit card transaction that has been authorized but for which the bank has not 

settled). The comment is generally adopted as proposed.

Some consumer groups argued that the disclosed account balance should not be 

permitted to reflect deposits not yet available under the institution’s funds availability 

policy, or debit card holds. They argued that inclusion of such funds misstates the 

balance and can cause consumers to incur overdraft fees. In contrast, industry 

commenters supported proposed comment 11(c)-1 based on operational concerns. These 

commenters agreed that the methods used by depository institutions for determining the 

balances that are available for the consumer’s use or withdrawal may vary significantly 

by institution. Industry commenters also agreed that the disclosed balance should be able 

to include funds that have deposited but not yet cleared. 

Proposed comment 11(c)-1 reflected the Board’s intent not to require institutions

to reconfigure their internal systems to provide “real-time” balance disclosures in order to 

comply with the balance disclosure provision. For example, some institutions may only 

be able to provide a balance to the ATM network that reflects the ledger balance for the 

consumer’s account at the end of the previous day after the institution has completed its 

processing activities. Section 230.11(c) does not require institutions to provide a “realtime” balance, but only prohibits institutions from including additional overdraft funds

such as a discretionary overdraft cushion in the disclosed balance. 

Additional balances
- 24 -

The February 2005 Joint Guidance stated that if more than one balance is 

provided, the institution should “separately (and prominently) identify the balance 

without the inclusion of overdraft protection.” 70 FR at 9132. Proposed § 205.11(c) 

incorporated this portion of the Joint Guidance by providing that the institution may, at 

its option, disclose a second account balance that includes the additional overdraft funds, 

if the institution prominently indicates that this balance includes funds provided by the 

institution to cover overdrafts.18

The final rule permits, but does not require, disclosure of an additional balance 

that includes these additional overdraft funds, which may be useful to some consumers. 

For example, consumers may wish to receive a balance disclosure that indicates how 

much overdraft coverage they have available, so that they can make an informed decision 

as to whether or not to go forward with a transaction. The final rule thus permits an 

additional balance to be disclosed, so long as the institution prominently states that the 

balance contains additional overdraft funds. To address commenter concerns that

consumers will be confused if multiple balances are disclosed to them on an automated 

 

Some consumer groups urged the Board to prohibit financial institutions from 

disclosing this second account balance. These commenters argued that disclosure of a 

second balance could be confusing to consumers, who may not realize they will incur 

fees by accessing the overdraft funds. One bank trade association also questioned 

whether permitting disclosure of a second balance would be particularly useful, although 

it supported including the option for banks to provide that information. 

 18 The FDIC Study found that of the 374 study population banks that extended their overdraft service to 

ATM withdrawals, most excluded the overdraft limit from ATM balances. Of the remaining banks, 16.1% 

displayed the overdraft limit separately from the account balance at proprietary ATMs (7.0% at nonproprietary ATMs), and 7.1% combined the overdraft limit with the account balance in the only balance 

displayed to customers at proprietary ATMs (5.6% at non-proprietary ATMs). See FDIC Study at 38-39.
- 25 -

system, new comment 11(c)-2 has been added to provide guidance on how institutions 

can appropriately identify that an additional balance includes overdraft funds. (Proposed 

comment 11(c)-2, described below, has been renumbered as comment 11(c)-3.) New 

comment 11(c)-2 explains that the institution may not simply state, for instance, that the 

second balance is the consumer’s “available balance,” or contains “available funds.” 

Rather, the institution should provide enough information to convey that the second 

balance includes these overdraft amounts. For example, the institution may state that the 

balance includes “overdraft funds.”

Further, the Board notes that § 230.11(c) does not affect the existing application 

of the advertising disclosure rules of § 230.11(b). Thus, to the extent an institution

includes the dollar amount of a discretionary overdraft limit in a disclosed balance on an 

automated system, the disclosure will continue to be considered an advertisement 

promoting the payment of overdrafts. See comment 11(b)-1.iii. Therefore, the 

disclosures required by § 230.11(b)(1) (including the amount of overdraft fees) must be 

provided. The existing exemption in § 230.11(b)(2) from these disclosures for ATM 

receipts also continues to apply. However, under the final rule, any receipt containing a 

second balance including overdraft funds must prominently state that those funds are 

included and may not simply label the second balance as the consumer’s “available 

balance” or “available funds.” See

Many institutions currently provide consumers the ability to opt out of or opt into 

their overdraft service. Where a consumer has opted out of the institution’s overdraft 

service (or, where an institution offers an opt-in and the consumer has not opted in), 

comment 11(c)-2 also clarifies that any additional balance disclosed may not include 

comment 11(c)(2).
- 26 -

funds provided under their institution’s service (because presumably the consumer would 

not have access to those funds). For example, if a consumer has $200 in his or her 

account, and has opted out of the institution’s overdraft service, a second balance may not 

reflect the additional $100 that the institution might otherwise have provided under the 

service. (However, if the consumer is not enrolled in the institution’s overdraft service 

but has a line of credit or other overdraft alternative, the additional balance may continue 

to include funds available pursuant to that other alternative.) 

Similarly, some institutions may provide consumers the ability to opt out of 

overdraft services for ATM and debit card transactions. In this instance, the institution 

would continue to offer the overdraft service for other transactions, such as check 

transactions. Because the institution’s overdraft service would be available for some, but 

not all transactions, comment 11(c)-2 states that if an institution discloses an additional 

balance where a consumer has opted out of some, but not all of the institution’s overdraft 

services, the institution may choose whether or not to include the overdraft funds in the 

balance. However, if the institution chooses to include the overdraft funds in the 

additional balance, it must indicate that the additional overdraft funds are not available 

for all transactions.

Proposed comment 11(c)-2 explained that the balance disclosure requirement 

applies to 

Automated systems

any automated system through which the consumer requests a balance, 

including, but not limited to, a telephone response machine (such as an interactive voice 

response system), at an ATM (both on the ATM screen and on receipts), or on an 

institution’s Internet site (other than live chats with an account representative). Proposed 
- 27 -

comment 11(c)-2 also clarified that the reference to ATMs applies equally to ATMs 

owned or operated by a consumer’s account-holding institution, as well as to “foreign”

ATMs, including those operated by non-depository institutions. Some industry 

commenters supported the proposed comment, stating that it reflected the current practice

at some institutions. However, other industry commenters argued that the account 

balance disclosure requirement should only apply to disclosures at proprietary ATMs. 

They stated that if the institution makes two balances available to the ATM network, one 

for balances and one for authorizations, it would have no control over what balances are 

displayed by a foreign ATM.

The comment, renumbered as comment 11(c)-3, is adopted with minor 

adjustments. The balance disclosure requirements apply to account balances an 

institution discloses through any ATM. Because account-holding institutions have 

discretion with respect to the balances they provide to an ATM network, they ultimately 

determine what additional funds (whether from the institution’s discretionary overdraft 

service, an overdraft line of credit, or a linked account) are included in those balances

(i.e.

Several industry commenters requested clarification that the rule applies only 

where a financial institution chooses to provide balance information, or when an ATM or 

other electronic terminal has the capability to provide a balance. The final rule applies 

only to the extent balance information is offered on an automated system; it does not 

, the institution has the discretion to provide to the network only balances that 

exclude overdraft funds). Thus, the Board believes that it is appropriate to include the 

information that account-holding institutions disclose through foreign ATMs within the 

scope of the rule. 
- 28 -

require financial institutions or other automated systems owners to provide balance

information on automated systems available to consumers. 

Consumer groups commented that the Board should apply the balance disclosure 

requirement to information provided during discussions with bank personnel, whether in 

person, by telephone or e-mail, or over the Internet. They argued that many consumers 

obtain account balances directly from bank personnel, and that banks should be required 

to instruct employees to provide consumers with an account balance that does not include 

additional funds. Nonetheless, the Board continues to believe that the compliance burden 

and enforcement challenges associated with monitoring individual conversations and 

responses would outweigh the benefits provided by such a rule. Therefore, the final rule 

applies only to balance information disclosed through an automated system. 

VI. Regulatory Flexibility Analysis 

The Board has prepared a final regulatory flexibility analysis as required by the

Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA). The RFA requires an agency to 

perform an assessment of the impact a rule is expected to have on small entities.

However, under section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory 

flexibility analysis otherwise required under section 604 of the RFA is not required if an 

agency certifies, along with a statement providing the factual basis for such certification, 

that the rule will not have a significant economic impact on a substantial number of small 

entities. Based on its analysis and for the reasons stated below, the Board certifies that 

the rule will not have a significant economic impact on a substantial number of small 

entities. 
- 29 -

1. Statement of the need for, and objectives of, the proposed rule. TISA was 

enacted, in part, for the purpose of requiring clear and uniform disclosures regarding 

deposit account terms and fees assessable against these accounts. Such disclosures allow 

consumers to make meaningful comparisons between different accounts and also allow 

consumers to make informed judgments about the use of their accounts. 12 U.S.C. 4301. 

TISA requires the Board to prescribe regulations to carry out the purpose and provisions 

of the statute. 12 U.S.C. 4308(a)(1). 

The Board is revising Regulation DD to expand the current requirements for 

disclosing totals for overdraft and returned item fees on periodic statements. The 

requirement is expanded to all institutions and not solely to institutions that promote the 

payment of overdrafts. Thus, all consumers that use overdraft services will receive 

additional information about fees to help them better understand the costs associated with 

their accounts, regardless of whether the service is marketed to them. The Board is also 

revising Regulation DD to address balance disclosures provided to consumers through 

automated systems. 

2. Significant issues raised by comments in response to the initial regulatory 

flexibility analysis

3. 

. In accordance with section 3(a) of the RFA, the Board conducted an 

initial regulatory flexibility analysis in connection with the proposed rule. The Board did 

not receive any comments on its initial regulatory flexibility analysis. 

Description and estimate of classes of small entities affected by the final rule. 

Approximately 12,356 depository institutions in the United States that must comply with 

TISA have assets of $175 million or less and thus are considered small entities for 

purposes of the RFA, based on June 30, 2008, Call Report data. Approximately 5,075 are 
- 30 -

institutions that must comply with the Board’s Regulation DD; approximately 7,281 are 

credit unions that must comply with NCUA’s Truth in Savings regulations which must be 

substantially similar to the Board’s Regulation DD.

The Board believes that many small depository institutions will not be 

significantly impacted by the final rule because many of these institutions already have 

required systems in place for compliance with the rule, either in conformity with the May 

2005 Regulation DD amendments or the February 2005 Joint Guidance containing 

similar obligations. Under the rule, all small depository institutions that did not 

previously revise their periodic statement disclosures to comply with the prior May 2005 

Regulation DD amendments because they did not promote their overdraft service will 

need to do so to reflect aggregate overdraft and aggregate returned-item fees for the 

statement period and year-to-date. Those institutions that previously revised their 

periodic statements may also need to reprogram their automated systems to include the 

specified fee table format in the statement. Institutions may also have to reprogram their 

automated systems to disclose balances that exclude additional funds the institution may 

provide to cover an overdraft, if the institution has not done so as previously 

recommended by the February 2005 Joint Guidance, and to exclude funds paid by the 

institution under a service subject to Regulation Z, or funds transferred from another 

account held individually or jointly by a consumer. To the extent institutions disclose an 

additional balance that includes overdraft funds, institutions may also have to reprogram 

their systems to prominently state that the balance includes those additional overdraft 

funds, as described in the preamble.
- 31 -

4. Recordkeeping, reporting, and other compliance requirements. As discussed 

in more detail above, institutions that have not previously provided total dollar amounts 

of fees imposed on the account for paying overdrafts and total dollar amounts of fees for 

returning items unpaid will be required to do so for both the statement period and the 

calendar year-to-date. Institutions that disclose balances through any automated system 

must also, at a minimum, disclose balances that are not supplemented by additional funds 

that may be provided to cover an overdraft. For example, the balance must exclude funds 

that will be paid by the institution under a service subject to Regulation Z, and funds 

transferred from another account held individually or jointly by a consumer. 

5. Steps taken to minimize the economic impact on small entities

The Board is also providing an implementation period that responds to 

commenters’ concerns about the time needed to comply with the final rule. The Board 

. The factual, 

policy, and legal reasons for selecting the alternatives adopted and why other significant 

alternatives were not adopted, are described above in the SUPPLEMENTARY 

INFORMATION. For example, the Board has provided more specific commentary on 

the balance disclosure rule in response to comments received in order to ease compliance 

burdens. In addition, based on the Board’s review of comments received and consumer 

testing results, the Board is not adopting the proposed format, content and timing 

requirements regarding a consumer’s right to opt out of overdraft coverage under 

Regulation DD, and instead is proposing these requirements under Regulation E (as well 

as an alternative opt-in proposal), revised in response to commenter suggestions. An 

initial RFA analysis is included in that proposal.
- 32 -

believes the extended effective date will decrease costs for small entities by providing 

them with sufficient time to come into compliance with the final rule’s requirements.

VII. Paperwork Reduction Act

In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3506; 

5 CFR part 1320 Appendix A.1), the Board reviewed the final rule under the authority 

delegated to the Federal Reserve by the Office of Management and Budget (OMB). The 

collection of information that is subject to the PRA by this final rulemaking is found in 

12 CFR part 230. The Federal Reserve may not conduct or sponsor, and an organization 

is not required to respond to, this information collection unless the information collection 

displays a currently valid OMB control number. The OMB control number is 7100-0271. 

This information collection is required to provide benefits for consumers and is 

mandatory (15 U.S.C. 1601 et seq

Section 269 of the Truth in Savings Act (TISA) (12 U.S.C. 4308) authorizes the 

Board to issue regulations to carry out the provisions of TISA. TISA and Regulation DD 

require depository institutions to disclose yields, fees, and other terms concerning deposit 

accounts to consumers at account opening, upon request, and when changes in terms 

occur. Depository institutions that provide periodic statements are required to include 

information about fees imposed, interest earned, and the annual percentage yield earned 

during those statement periods. The act and regulation mandate the methods by which 

institutions determine the account balance on which interest is calculated. They also 

contain rules about advertising deposit accounts. To ease the compliance cost 

.). Since the Board does not collect any information, 

no issue of confidentiality arises. The respondents/recordkeepers are entities subject to 

Regulation DD, including for-profit small business depository institutions. 
- 33 -

(particularly for small entities), model clauses and sample forms are appended to the 

regulation. Depository institutions are required to retain evidence of compliance for 

twenty-four months, but the regulation does not specify types of records that must be 

retained. 

Regulation DD applies to all depository institutions except credit unions. Credit 

unions are covered by a substantially similar rule issued by the National Credit Union 

Administration. Under the PRA, the Federal Reserve accounts for the paperwork burden 

associated with Regulation DD only for Federal Reserve-supervised institutions. 

Regulation DD defines Federal Reserve-regulated institutions as: state member banks, 

branches and agencies of foreign banks (other than federal branches, federal agencies, 

and insured state branches of foreign banks), commercial lending companies owned or 

controlled by foreign banks, and organizations operating under section 25 or 25A of the 

Federal Reserve Act. Other federal agencies account for the paperwork burden imposed 

on the depository institutions for which they have administrative enforcement authority. 

The rulemaking makes the current requirements for disclosing totals for overdraft 

and returned item fees on periodic statements applicable to all institutions and not solely 

to institutions that promote the payment of overdrafts. The rulemaking also requires that 

institutions that disclose balances through any automated system must, at a minimum, 

disclose a balance that is not supplemented by additional funds that may be provided to 

cover an overdraft. For example, the balance must exclude funds that will be paid by the 

institution in its discretion or under a service subject to Regulation Z, or funds transferred 

from another account held individually or jointly by a consumer. 
- 34 -

On May 19, 2008, a notice of proposed rulemaking (NPR) was published in the 

Federal Register (73 FR 28739). The comment period for this notice expired July 18, 

2008. No comments specifically addressing the burden estimate were received. As 

mentioned above, the proposed amendment regarding notice of a consumer’s right to opt 

out of an institution’s overdraft service has been withdrawn. Instead, the Federal Reserve 

is separately proposing to incorporate this notice requirement into its Regulation E (OMB

No. 7100-0200). 

The Federal Reserve has revised its burden estimate in this final rule to reflect the 

withdrawn proposed notice. In addition, the number of Federal Reserve-regulated 

institutions that are deemed to be respondents for the purposes of the PRA has been 

updated from 1,172 to 1,138.

The current total annual burden is estimated to be 170,984 hours. The final rule 

will impose a one-time increase in the total annual burden under Regulation DD by 

18,208 hours to 189,192 hours.

The Board estimates that 1,138 respondents regulated by the Federal Reserve

would take, on average, 16 hours (two business days) to re-program and update their 

systems to comply with the disclosure requirements. These disclosure requirements 

include disclosure of total fees on periodic statements (§ 230.11(a)) and disclosure of 

account balances (§ 230.11(c)). The Federal Reserve estimates the total annual one-time 

burden to be 18,208 hours and believes that, on a continuing basis, there would be no 

increase in burden as the disclosures would be sufficiently accounted for once 

incorporated into the current periodic statement disclosure (§ 230.6). To ease the 
- 35 -

compliance burden, model clause B-10 (aggregate overdraft and returned item fees 

sample clause) (§ 230.11), is adopted in Appendix B. 

The other federal financial agencies are responsible for estimating and reporting 

to OMB the total paperwork burden for the institutions for which they have 

administrative enforcement authority. They may, but are not required to, use the Board’s 

burden estimation methodology. Using the Board’s method, the total estimated annual 

burden for all financial institutions subject to Regulation DD, including Federal Reserveregulated institutions, would be approximately 2,584,275 hours. The final rule would 

impose a one-time increase in the estimated annual burden for all institutions subject to 

Regulation DD by 275,200 hours to 2,859,475 hours. The above estimates represent an 

average across all respondents and reflect variations between institutions based on their 

size, complexity, and practices. All covered institutions, including depository institutions 

(of which there are approximately 17,200), potentially are affected by this collection of 

information, and thus are respondents for purposes of the PRA. 

The Federal Reserve has a continuing interest in the public’s opinions of our 

collections of information. At any time, comments regarding the burden estimate, or any 

other aspect of this collection of information, including suggestions for reducing the 

burden, may be sent to: Secretary, Board of Governors of the Federal Reserve System, 

20th and C Streets, N.W., Washington, DC 20551; and to the Office of Management and 

Budget, Paperwork Reduction Project (7100-0271), Washington, DC 20503.

List of Subjects in 12 CFR Part 230

Advertising, Banks, Banking, Consumer protection, Reporting and recordkeeping 

requirements, Truth in savings. 
- 36 -

For the reasons set forth in the preamble, the Board amends Regulation DD, 12 

CFR part 230, and the Official Staff Commentary, as set forth below:

Part 230 – TRUTH IN SAVINGS (REGULATION DD)

1. The authority citation for part 230 continues to read as follows:

Authority: 12 U.S.C. 4301 et seq.

2. Section 230.1 is amended by revising paragraph (a) to read as follows:

§ 230.1 Authority, purpose, coverage, and effect on state laws.

(a) Authority. This regulation, known as Regulation DD, is issued by the Board 

of Governors of the Federal Reserve System to implement the Truth in Savings Act of 

1991 (the act), contained in the Federal Deposit Insurance Corporation Improvement Act 

of 1991 (12 U.S.C. 3201 et seq., Pub. L. 102-242, 105 Stat. 2236). Informationcollection requirements contained in this regulation have been approved by the Office of 

Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been 

assigned OMB No. 7100-0271.

* * * * *

3. Section 230.11 is amended by revising the heading, paragraphs (a), (b)(2)(x) 

and (b)(2)(xi), and adding paragraphs (b)(2)(xii) and (c) to read as follows: 

§ 230.11 Additional disclosure requirements for overdraft services. 

(a) Disclosure of total fees on periodic statements (1) General. A depository 

institution must separately disclose on each periodic statement, as applicable:

(i) The total dollar amount for all fees or charges imposed on the account for 

paying checks or other items when there are insufficient or unavailable funds and the 

account becomes overdrawn; and
- 37 -

(ii) The total dollar amount for all fees or charges imposed on the account for 

returning items unpaid.

(2) Totals required. The disclosures required by paragraph (a)(1) of this section 

must be provided for the statement period and for the calendar year-to-date;

(3) Format requirements. The aggregate fee disclosures required by paragraph (a) 

of this section must be disclosed in close proximity to fees identified under § 230.6(a)(3), 

using a format substantially similar to Sample Form B-10 in appendix B.

(b) Advertising disclosures for overdraft services. * * *

(2) Communications about the payment of overdrafts not subject to additional 

advertising disclosures

(c) 

. * * *

(x) a notice provided to a consumer, such as at an ATM, that completing a 

requested transaction may trigger a fee for overdrawing an account, or a general notice 

that items overdrawing an account may trigger a fee; 

(xi) informational or educational materials concerning the payment of overdrafts 

if the materials do not specifically describe the institution’s overdraft service; or

(xii) an opt-out or opt-in notice regarding the institution’s payment of overdrafts

or provision of discretionary overdraft services.

* * * * *

Disclosure of account balances. If an institution discloses balance 

information to a consumer through an automated system, the balance may not include 

additional amounts that the institution may provide to cover an item when there are 

insufficient or unavailable funds in the consumer’s account, whether under a service 

provided in its discretion, a service subject to the Board’s Regulation Z (12 CFR part 
- 38 -

226), or a service to transfer funds from another account of the consumer. The institution 

may, at its option, disclose additional account balances that include such additional 

amounts, if the institution prominently states that any such balance includes such 

additional amounts and, if applicable, that additional amounts are not available for all 

transactions.

4. Amend Appendix B to part 230, by adding B-10 to read as follows:

APPENDIX B TO PART 230 – MODEL CLAUSES AND SAMPLE FORMS

* * * * *

B-10 Aggregate Overdraft and Returned Item Fees Sample Form

[Insert B-10 Aggregate Overdraft and Returned Item Fees Sample Form]
- 39 -

5. In Supplement I to part 230:

a. In Section 230.11 and Section 230.11(a), the headings are revised and 

paragraphs (a)(1)-1. and (a)(1)-2. are removed.

b. In Section 230.11, paragraphs (a)(1)-3. through (a)(1)-8. are redesignated as 

paragraphs (a)(1)-1. through (a)(1)-6, respectively. 

c. In Section 230.11, new paragraphs (a)(1)-2. through (a)(1)-4 are revised.

d. In Section 230.11, paragraph (a)(3)-1. is revised.

e. In Section 230.11, paragraph (a)(5)-1. is removed.

f. In Section 230.11, new paragraphs (c)-1. through (c)-3. are added.

Supplement I to Part 230 – Official Staff Interpretations

* * * * *

Section 230.11 Additional disclosures regarding the payment of overdrafts

(a) Disclosure of total fees on periodic statements

(a)(1)

2. 

General

* * * * *

Fees for paying overdrafts. Institutions must disclose on periodic statements a 

total dollar amount for all fees or charges imposed on the account for paying overdrafts. 

The institution must disclose separate totals for the statement period and for the calendar 

year-to-date. The total dollar amount includes per-item fees as well as interest charges, 

daily or other periodic fees, or fees charged for maintaining an account in overdraft 

status, whether the overdraft is by check or by other means. It also includes fees charged 

when there are insufficient funds because previously deposited funds are subject to a hold 

or are uncollected. It does not include fees for transferring funds from another account of 
- 40 -

the consumer to avoid an overdraft, or fees charged under a service subject to the Board’s 

Regulation Z (12 CFR part 226).

3. Fees for returning items unpaid. The total dollar amount for all fees for 

returning items unpaid must include all fees charged to the account for dishonoring or 

returning checks or other items drawn on the account. The institution must disclose 

separate totals for the statement period and for the calendar year-to-date. Fees imposed 

when deposited items are returned are not included. Institutions may use terminology 

such as “returned item fee” or “NSF fee” to describe fees for returning items unpaid.

4. Waived fees. In some cases, an institution may provide a statement for the 

current period reflecting that fees imposed during a previous period were waived and 

credited to the account. Institutions may, but are not required to, reflect the adjustment in 

the total for the calendar year-to-date and in the applicable statement period. For 

example, if an institution assesses a fee in January and refunds the fee in February, the 

institution could disclose a year-to-date total reflecting the amount credited, but it should 

not affect the total disclosed for the February statement period, because the fee was not 

assessed in the February statement period. If an institution assesses and then waives and 

credits a fee within the same cycle, the institution may, at its option, reflect the 

adjustment in the total disclosed for fees imposed during the current statement period and 

for the total for the calendar year-to-date. Thus, if the institution assesses and waives the 

fee in the February statement period, the February fee total could reflect a total net of the 

waived fee.

* * * * *
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(a)(3) Time period covered by disclosures

1. Periodic statement disclosures. The disclosures under section 230.11(a) must 

be included on periodic statements provided by an institution starting the first statement 

period that begins after January 1, 2010. For example, if a consumer’s statement period 

typically closes on the 15th of each month, an institution must provide the disclosures 

required by section 230.11(a)(1) on subsequent periodic statements for that consumer 

beginning with the statement reflecting the period from January 16, 2010 to February 15, 

2010.

* * * * *

(c) Disclosure of account balances

1. Balance that does not include additional amounts. For purposes of the balance 

disclosure requirement in section 230.11(c), if an institution discloses balance 

information to a consumer through an automated system, it must disclose a balance that 

excludes any funds that the institution may provide to cover an overdraft pursuant to a 

discretionary overdraft service, that will be paid by the institution under a service subject 

to the Board’s Regulation Z (12 CFR part 226), or that will be transferred from another 

account held individually or jointly by a consumer. The balance may, but need not, 

include funds that are deposited in the consumer’s account, such as from a check, that are 

not yet made available for withdrawal in accordance with the funds availability rules 

under the Board’s Regulation CC (12 CFR part 229). In addition, the balance may, but 

need not, include funds that are held by the institution to satisfy a prior obligation of the

consumer (for example, to cover a hold for an ATM or debit card transaction that has 

been authorized but for which the bank has not settled). 
- 42 -

2. Additional balance. The institution may disclose additional balances 

supplemented by funds that may be provided by the institution to cover an overdraft, 

whether pursuant to a discretionary overdraft service, a service subject to the Board’s 

Regulation Z (12 CFR part 226), or a service that transfers funds from another account 

held individually or jointly by the consumer, so long as the institution prominently states 

that any additional balance includes these additional overdraft amounts. The institution 

may not simply state, for instance, that the second balance is the consumer’s “available 

balance,” or contains “available funds.” Rather, the institution should provide enough 

information to convey that the second balance includes these amounts. For example, the 

institution may state that the balance includes “overdraft funds.” Where a consumer has 

opted out of the institution’s discretionary overdraft service, any additional balance 

disclosed should not include funds institutions provide under that service. Where a 

consumer has opted out of the institution’s discretionary overdraft service for some, but 

not all transactions (e.g.

3. 

, the consumer has opted out overdraft services for ATM and 

debit card transactions), an institution that includes funds from its discretionary overdraft 

service in the balance should convey that the overdraft funds are not available for all 

transactions. For example, the institution could state that overdraft funds are not 

available for ATM and debit card transactions.

Automated systems. The balance disclosure requirement in section 230.11(c)

applies to any automated system through which the consumer requests a balance, 

including, but not limited to, a telephone response system, the institution’s Internet site,

or an ATM. The requirement applies whether the institution discloses a balance through

an ATM owned or operated by the institution or through an ATM not owned or operated 
- 43 -

by the institution (including an ATM operated by a non-depository institution). If the 

balance is obtained at an ATM, the requirement also applies whether the balance is 

disclosed on the ATM screen or on a paper receipt.

* * * * *

By order of the Board of Governors of the Federal Reserve System, December __, 

2008.

Jennifer J. Johnson,

Secretary of the Board.

Billing Code 6210-01-P