Regulation E – How Howard Bank handles debit card and ATM Transactions.

Regulation E was put into place in 1978 by the Federal Reserve to establish the rights and liabilities of consumers as well as the responsibilities of all participants (such as banks) in electronic funds transfer activities, such as ATM and debit card transactions. New rules go into effect July 1 and August 15 that further address how financial institutions may handle overdrafts related to one time debit card (POS) transactions and ATM withdrawals. Regulation E ONLY applies to consumer accounts. It does NOT apply to business accounts.

What changes is Howard Bank making so they are following the Regulation?

• With Howard Banks Hands On approach, we DO NOT have to make any changes. Simply put;
• If you have funds available in your checking account when you make a debit card transaction or try to withdraw from an ATM, we will authorize your transaction.
• If you do not have funds available in your checking account when you make a debit card transaction or try to withdraw from an ATM, we will not authorize your transaction*.

Why July 1 and August 15, 2010?

• July 1 – The regulation applies to any new consumer checking account that is opened after this date.
• August 15 – The regulation applies to any consumer checking account that was opened prior to July 1, 2010.

This means, all debit card and ATM transactions on consumer checking accounts (no matter the open date) must be following Regulation E on August 15, 2010.

*There may be some instances where you do have funds available in your Howard Bank checking account at the time you make your debit card transaction but other intervening transactions cause you not to have funds in your account when the debit card transaction is collected. In these situations we will pay for your debit card transaction but not charge you an overdraft fee for the debit card purchase.