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INTRODUCTION
This survey summarizes recent developments affecting deposits and payment systems, including: (i) overdraft guidance developments, (ii) new federal benefits garnishment procedures, (iii) new rules governing prepaid access programs, (iv) debit card interchange and network rules, and (v) proposed remittance transfer rules.
AGENCY OVERDRAFT GUIDANCE
The Federal Deposit Insurance Corporation ("FDIC") published guidance regarding overdraft payment programs (the "Guidance")1 for implementation by July 1, 2011.2 The Guidance requires an FDIC-supervised bank to: (i) allow depositors to opt out of overdraft coverage for non-electronic transactions (e.g., checks) and to opt in to appropriate overdraft payment products; (ii) monitor and limit chronic use of overdraft coverage; (iii) set appropriate daily limits on overdraft fees; (iv) avoid processing transactions in a way that maximizes costs to depositors; and (v) mitigate credit, legal, reputational, safety, and soundness and other risks.3 The FDIC also provided clarification of the Guidance in the form of answers to frequently asked questions ("FAQs").4 The FAQs specify that a customer's usage of an overdraft program becomes excessive or chronic when that customer overdraws his or her account on more than six occasions on which a fee is assessed in a rolling twelve-month period.5 A bank must make reasonable follow-up efforts to inform a customer whose overdraft usage has become excessive or chronic about available alternatives that may be better suited to short-term credit needs.6 The TAQs also clarify that transactions should be processed in a "neutral order," which includes clearing transactions in the order received, by check number, or by serial number sequence.7 Re-ordering transactions to clear the largest item first is not considered to be neutral because doing so tends to increase the number of overdraft fees.8
NEW FEDERAL BENEFIT PAYMENTS GARNISHMENT PROCEDURES
The Department of Treasury, Social Security Administration, Department of Veterans Affairs, Railroad Retirement Board, and Office of Tersonnel Management (the "Agencies") jointly published an interim final rule to implement existing statutory restrictions on the garnishment of federal benefit payments.9 When a bank receives a garnishment order, the bank must review the order and determine whether a Notice of Right to Garnish Federal Benefits ("Federal Notice") from the United States or a state child support enforcement agency is attached to the order.10 If a Federal Notice is attached, the bank should follow...