We are not aware of any Illinois laws or regulations that require overdraft notices to be sent by mail. Accordingly, we believe your bank may send electronic overdraft notices to your customers provided they have consented to receive electronic notifications in accordance with the federal E-Sign Act’s requirements. We also believe it would be prudent for your bank to indicate in its account disclosures that overdraft notices may be sent electronically.

Notably, while the Uniform Commercial Code does not require banks to send a notice to customers when their accounts are overdrawn, the 2005 Joint Guidance on Overdraft Protection Programs recommends that banks “[p]romptly notify” their customers each time “overdraft protection has been accessed, for example, by sending a notice to consumers the day the overdraft protection program has been accessed.”  However, neither the 2005 Joint Guidance on Overdraft Protection Programs nor the FDIC’s Compliance Examination Manual (which adopted this guidance) indicates that such notices must be sent by mail. Consequently, we believe that such notices may be sent electronically, with your customers’ consent.

For resources related to our guidance, please see:

• E-Sign Act, 15 USC 7001(c) (“(1) Consent to electronic records. Notwithstanding subsection (a), if a statute, regulation, or other rule of law requires that information relating to a transaction or transactions in or affecting interstate or foreign commerce be provided or made available to a consumer in writing, the use of an electronic record to provide or make available (whichever is required) such information satisfies the requirement that such information be in writing if

(A) the consumer has affirmatively consented to such use and has not withdrawn such consent;

(B) the consumer, prior to consenting, is provided with a clear and conspicuous statement . . . ;

(C) the consumer (i) prior to consenting, is provided with a statement of the hardware and software requirements for access to and retention of the electronic records; and (ii) consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent; . . .”)

• Joint Guidance on Overdraft Protection Programs, 70 Fed. Reg. 9127, 9132 (February 24, 2005) (“Promptly notify consumers of overdraft protection program usage each time used. Promptly notify consumers when overdraft protection has been accessed, for example, by sending a notice to consumers the day the overdraft protection program has been accessed. The notification should identify the date of the transaction, the type of transaction, the overdraft amount, the fee associated with the overdraft, the amount necessary to return the account to a positive balance, the amount of time consumers have to return their accounts to a positive balance, and the consequences of not returning the account to a positive balance within the given timeframe. . . .”)
• FDIC Compliance Examination Manual, Lending Section, Overdraft Payment Programs, page 13.8 (“The institution promptly notifies customers each time an overdraft payment program has been accessed. The notice identifies the date of the transaction, type of transaction, item amount, overdraft amount, fee imposed, amount necessary to return the account to a positive balance, amount of time the customer has to return the account to a positive balance, and the consequences of not returning the account to a positive balance within that time period. . . .”)