OUrs is the same as Dani's.

So do we have to have new procedures and policies in place by 7/21/11 or should we just be preparing and waiting for final rules from the OCC on this?

Dani has said it plainly: Have your documentation out there for the next exam if you stick with High to Low posting order. I wouldn't “bet the bank” on the argument that depositors want their largest checks paid first because they're the most important ones.

"Heck no, not if I have to pay a fee on my burger and fries! But don't return my check either! Big bad bank is always out to get me, you should know how much I have in my account when I write checks and use my card. Why do you let me spend more money than I have anyway?"

::like::

Does this Overdraft Guidance apply to Business Accounts?

In general, no. However, you can expect criticism from a safety and soundness perspective if you have many "frequent flyer" business accounts in your overdraft payment service portfolio.

We've disclsoed this for years - however, we have expanded the disclosure - my thought, because we have disclosed it for years - should we notify our existing customers? it says the same thing - just more elaborate.

Does this rule apply to customers that we offer a credit line to? For exmaple if we give them a line of credit and a check comes through for payment and we sweep the funds to cover because of insuffient funds does this apply? We do not charge him anything other than interest from the credit line.

No. the guidance does not apply to LOC or transfers from another account to cover OD's.

Thank goodness! HAve a great 4th everyone!

We have implemented a fee limit to four (4) charges per day under the new guidance. While it is early to tell the full impact of these changes, the data being reviewed tells us the numbers could be significant. What limit have others implemented for their daily charges? Also, has anyone considered coming up with an "informed consent" document that a customer "Opts In" to overdraft usage ouside of the new OD Guidance requirements? And if so, do you maintain the daily charge limit regardless of the number of OD's paid or is it unlimited?

Thanks,

Lisa

Lisa,
We have limited our fees to 4 per day. After the 4th i believe it is up to the officer to either pay and waive or return (and waive)
We haven't thought about opting in outside of that. Luckily we only have a few customers who OD more than 4 items in a day.

Until banks do exactly that they will continue fighting a rearguard action on overdraft fees and the regulators will continue to bludgeon the stragglers. Banks need to just drop all of the garbage centered around promoting overdrafts with gimicky names and just switch to opt-in programs based on full disclosure.

Informed consent is an absolute defense to UDAP accusations from field examiners spouting personal opinions.

I think in the long run you are better off just charging a return item fee, return the item and call it a day. With all the notifications and relying on the customers to pay you back the overdraft coverage you extended to them in our encomonic times.I have seen institutions issue overdraft coverage and see there return items cut in half. A year later there charge offs went through the roof becuase the customers didnt pay them back.

We are an adhoc bank that is going to follow the guidelines:
6 NSF fees a day and $10 deminumus and counseling for six overdrafts in a rolling period. Does anyone have a template letter for counseling?

I have a sample PM me if you still need it.

Sorry - I just couldn't help it!


You might consider sending them to these folks:
www.nfcc.org


Or this article:
http://www.nfcc.org/consumer_tools/consumertips/stepstotake.cfm

and a nice on-line budget worksheet:
http://www.nfcc.org/FinancialEducation/monthlyincome.cfm

roflmao!!!!

Tryin 2 Comply - recently changed payment order to smallest to largest (used to be largest to smallest) - examiner wanted us to evaluate our payment order to ensure it is as consumer friendly as possible. - reading between the lines, they did not like largest to smallest.

If you return it, why are you going to waive the fee? Doesn't the guidance only apply when you pay and charge a fee?

I'm not 100% sure on that jross. It was my impression that the most we would charge for is 4 items per day, paid or returned, and that after the 4th, we would pay or return but waive the fee. but I may be misinformed.

I believe you are right that it only applies if you pay and charge a fee. Seems like I read that somewhere. If anyone knows for sure, I'd love to see a link to the info.

Occasions are based on fees imposed for paying an overdrafting item. The guidance does not affect fees for returning items unpaid, nor is there any expectation that fee limits per day, week, month or otherwise would affect anything other than overdraft fees.

Thanks John Burnett.
But I'm willing to bet they will be suggesting guidance on all the fees before long.

Ken, this question came up yesterday when we were training Branch Managers. Since the targeted outreach approach allows for a determination of the customer's preference for future contact, should we develop a form to document this consent? Currently we have suggested posting the information on our "documentation screens" for customer contact, but wonder if getting consent in writing is a better practice.