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December 17, 2014
Integrated Disclosures - An Implementation Strategy
Mary Beth Guard and Jack Holzknecht

December 18, 2014
Loan Review Best Practices for a Community Bank
Bob Fritzlan

December 19, 2014
PREPAID PRODUCTS - Understanding the CFPB Proposal
John Burnett

January 6, 2015
Business Accounts Documentation and Procedures with Beneficial Ownership
Deborah Crawford

January 6, 2015
FFIEC Cybersecurity Initiatives and Observations from the 2014 Assessments
Susan Orr

January 15, 2015
The ABC's of IRAs - The Basic Ingredients
Patrice Konarik

January 20, 2015
B & Z Appraisal Rules - Getting Them Right
Jack Holzknecht

January 21, 2015
HMDA Soup to Nuts
David Dickinson



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#1567939 - 06/21/11 06:22 PM Overdraft Letter
Local banker Offline
100 Club

Registered: 02/12/08
Posts: 115
July 1st is quickly approaching, and I just realized, we may have customers hit the six overdrafts in a rolling 12 month period within a week! Our bank is using the targeted outreach approach since we don't have the ability on our system to send out personalized statement messages. Does anyone have a sample overdraft letter they would be willing to share?

Thanks!

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Operations Compliance
#1568704 - 06/23/11 11:00 AM Re: Overdraft Letter [Re: Local banker]
Oursisnottoreasonwhy Offline
Gold Star

Registered: 11/30/04
Posts: 318
Loc: Illinois
The Dodd-Frank Act enacted by Congress in 2010, requires the bank to provide you with this notice if the bank pays items that overdraw your account and charges to your account 6 or more overdraft or overdraft related fees in a rolling 12 month cycle.

There may be less costly options available to you such as Automatic Transfers from other deposit accounts you may have with the bank or our RediCredit unsecured personal line of credit that is tied to your deposit account. You may contact our customer service department at 123-345-6789 to discuss these alternatives which may assist you in minimizing overdraft fees charged to your account.

Thank you for permitting us to serve your banking needs.

You have the right to revoke and or change your election at any time.

[ ] I wish to sign-up for Automatic Transfers and I will sign an authorization form to transfer funds from my checking or savings account into the overdraft account. I understand that this service includes a fee of $5.00 per transfer.

[ ] I want to apply for the bank’s RediCredit product. Please mail me an application.

[ ] I elect to participate in the bank’s overdraft program.

[ ] I elect NOT to participate in the bank’s overdraft program.


[ ] I am aware of my options, and do not wish to be contacted in the future.

Please sign and return this form by one of the following: mail, in person, fax or email.


Signature Account # Date

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#1568769 - 06/23/11 11:54 AM Re: Overdraft Letter [Re: Oursisnottoreasonwhy]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30970
Loc: Cape Cod
It used to be that some bankers blamed policies and procedures on fictional connections to the USA PATRIOT Act. Your proposed letter is crediting a non-existent connection to the Dodd-Frank Act. I don't think that's good policy.

It's your bank's policy or procedure, regardless of the fact that it's based on Guidance (not law) from the FDIC (not Congress). Own up to it. Don't "blame" someone else.
_________________________
John S Burnett
BankersOnline.com

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#1568862 - 06/23/11 01:00 PM Re: Overdraft Letter [Re: John Burnett]
BrianC Offline
Power Poster

Registered: 11/26/04
Posts: 2938
Loc: Illinois
"The devil made me do it." "The government made me do it." Same story, different century.
_________________________
I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1568955 - 06/23/11 02:13 PM Re: Overdraft Letter [Re: BrianC]
Local banker Offline
100 Club

Registered: 02/12/08
Posts: 115
Thanks oursisnottoreasonwhy, this is a good starting place.

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#1569012 - 06/23/11 02:53 PM Re: Overdraft Letter [Re: John Burnett]
Oursisnottoreasonwhy Offline
Gold Star

Registered: 11/30/04
Posts: 318
Loc: Illinois
John, You are absolutely correct. That was my oversight. With all the Dodd Frank stuff coming up 7/21 that's were my brain took me. It absolutely is the FDIC not Dodd Frank.

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#1569169 - 06/23/11 04:42 PM Re: Overdraft Letter [Re: Oursisnottoreasonwhy]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30970
Loc: Cape Cod
Other than the reference to the outside source of the requirement, which I would not use, I think the rest of your letter seems excellent.
_________________________
John S Burnett
BankersOnline.com

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#1569230 - 06/23/11 05:29 PM Re: Overdraft Letter [Re: John Burnett]
Oursisnottoreasonwhy Offline
Gold Star

Registered: 11/30/04
Posts: 318
Loc: Illinois
Change the first paragraph to:

Dear Customer:

Our records indicate that your account has been charged 6 or more fees for overdrafts during the past twelve months. Bank policy requires that you receive this notice if we pay items that overdraw your account and we charge your account 6 or more overdraft or overdraft related fees in a rolling 12 month cycle.

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#1570179 - 06/27/11 09:47 AM Re: Overdraft Letter [Re: Oursisnottoreasonwhy]
Hollywood1 Offline
New Poster

Registered: 08/01/06
Posts: 24
Can someone clarify something for me? Does the OD letter have to be sent after 6 times in the last 12 months? We feel like 6 is too small a #. Can we say for example...10 times in the last 12 months. I was thinking 6 was just an example. Is it part of the guidance?

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#1570426 - 06/27/11 01:45 PM Re: Overdraft Letter [Re: Hollywood1]
Always In Training Offline
Platinum Poster

Registered: 07/11/06
Posts: 686
Loc: Where the Green Grass Grows
Ken @ Pegasus would say "more than 6" which is = 7. And yes, more than 6 is a part of the "guidance" from the FDIC. 10 times in the last 12 months will get you in hot water FAST.

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#1571553 - 06/29/11 12:58 PM Re: Overdraft Letter [Re: Always In Training]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30970
Loc: Cape Cod
Yes. As unrealistic as you may feel the "more than 6 in 12" guidance is, it is the measure that FDIC examiners will be using when they check out your OD program.
_________________________
John S Burnett
BankersOnline.com

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#1571810 - 06/29/11 04:09 PM Re: Overdraft Letter [Re: John Burnett]
brainOverload Offline
Gold Star

Registered: 07/02/08
Posts: 269
Loc: DFW, Texas
ok...guidance says:

Monitor programs for excessive or chronic customer use, and if a customer overdraws his or her account on more than six occasions where a fee is charged in a rolling twelve month period, undertake meaningful and effective follow-up action, including, for example:
*Contacting the customer (e.g., in person or via telephone) to discuss less costly alternatives to the automated overdraft payment program such as a linked savings account, a more reasonably priced line of credit consistent with safe and sound
banking practices, or a safe and affordable small-dollar loan;4 and
*Giving the customer a reasonable opportunity to decide whether to continue fee-based overdraft coverage or choose another available alternative.

Here's the question...If you call that customer according to this and that customer continues to be overdrawn and incurring fees for the next week, do you keep calling them each day? It is still a rolling 12 months. It sounds stupid and I figure we decide how we are going to handle it for ourselves but what is reasonable? What are other banks going to do?
_________________________
I've got a problem for your solution...

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#1571910 - 06/29/11 05:59 PM Re: Overdraft Letter [Re: brainOverload]
dcl1963 Offline
100 Club

Registered: 02/28/06
Posts: 177
Loc: LA
I'm referring to the FAQs, section under Meaningful & Effective Follow-up. I interpret you have to continue contact unless the customer indicates a specific "preference regarding subsequent contact". If they indicate they don't want to be contacted again, then you're off the hook.

Looks like we'll be mailing a letter (unless our Core can come up with a way to add to statement very quickly) within 30 days after the 6 in 12 occurance & continue to do so unless the customer indicates they no longer want the letter.
_________________________
In God we trust, all others pay cash. . . Jean Shepherd

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#1572014 - 06/30/11 08:37 AM Re: Overdraft Letter [Re: dcl1963]
brainOverload Offline
Gold Star

Registered: 07/02/08
Posts: 269
Loc: DFW, Texas
We have a letter that will generate automatically but the guidance says to contact the customer in person or by telephone so we decided to call every 90 days after the first call at the 6 in 12 occurance unless there is an immediate resolution. I see this as eventually eliminating our automatic overdraft protection program.
_________________________
I've got a problem for your solution...

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#1572022 - 06/30/11 08:49 AM Re: Overdraft Letter [Re: brainOverload]
RR Joker Offline
10K Club

Registered: 11/15/02
Posts: 16491
Loc: The Swamp
Those are just examples...how you handle contact is up to the bank, IMHO.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#1572025 - 06/30/11 08:50 AM Re: Overdraft Letter [Re: RR Joker]
brainOverload Offline
Gold Star

Registered: 07/02/08
Posts: 269
Loc: DFW, Texas
Well after reading the FAQ (again) we may be changing our way of doing this all together.
_________________________
I've got a problem for your solution...

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#1584734 - 07/28/11 02:37 PM Re: Overdraft Letter [Re: brainOverload]
ccman Offline
Platinum Poster

Registered: 09/04/07
Posts: 511
Praise and glory, you have seen the "regulatory light" brother! It's what they were after in the beginning.

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#1835504 - 07/23/13 11:33 AM Re: Overdraft Letter [Re: Local banker]
raiders Online
Platinum Poster

Registered: 05/22/13
Posts: 503
Loc: OH
Does the 12 month period "reset" after sending a letter?

If a customer exceeds 6 occurrences and we send a letter and next week they have three more, do we send another letter at that point and keep sending with each OD until they tell us not to send them anymore?
_________________________
I just felt like running. - Forrest Gump

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#1835560 - 07/23/13 12:35 PM Re: Overdraft Letter [Re: Local banker]
Dani York, CRCM Offline
Power Poster

Registered: 04/13/05
Posts: 3301
Loc: TN
Our counter resets after each letter. I the letters that are sent in Excel. If I have a customer who shows up alot on that list, I call them and discuss the program and their usage.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1835563 - 07/23/13 12:45 PM Re: Overdraft Letter [Re: Local banker]
raiders Online
Platinum Poster

Registered: 05/22/13
Posts: 503
Loc: OH
So just to be clear if you sent a letter today your 12 month period would start again and if the customer exceeds another six by the end of December you would send another letter?
_________________________
I just felt like running. - Forrest Gump

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#1835610 - 07/23/13 02:02 PM Re: Overdraft Letter [Re: Local banker]
Dani York, CRCM Offline
Power Poster

Registered: 04/13/05
Posts: 3301
Loc: TN
Yes.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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