Premise: Executive officer, overdraft greater than $1,000 (less than $5,000) but never more than one day. Has other related party accounts that would cover the overdraft, but our system will not allow the automatic transfer. (Already set to transfer out of the main account to cover the related interest accounts.)

Would this be considered a violation?

With the facts you have presented, I believe it would.

Yes, I would agree it would be a violation. If you have an inaterest bearing LOC set up for overdraft protection...I would highly recommend requiring your exec officers to have one.

Is there not a defense that the officer's desire to have OD Protection from reciprocating accounts and the system won't handle it?

No. You need to have a auto-transfer of some sort set up to cover the OD. If you can't use other deposit accounts, your options are limited. You'll need to have this EO apply for and be approved for an OD line of credit.

Thanks again John!