When a customer uses one of our debit cards, the authorized amount acts like a hold on the customer's account- reducing the available balance in the account. This has caused customers to appear on our NSF list who are not really overdrawn- but who would be if the debit card transaction were to post to the account. I know that the debit card transaction could possibly never post to the account, or could post for an amount different than the authorization, so should we consider the account overdrawn (and assess NSF fees) when the authorization creates this "overdrawn" state?

I don't believe you could assess an NSF fee for the authorizations, since the transaction(s) didn't happen yet. Often, businesses run through additional authorizations to cover ancillary, potential costs, i.e. hotels, car rentals. These charges may never occur, and you would be charging NSF fees on potential overdrafts.

You have an overdraft on available funds, not ledger funds, which is the actual balance in the account.

My feelings as well. Thanks for your input.

When a customer authorizes a transaction (including a rental car, etc.), the available balance will be reduced while the transaction is in an "authorization" status. If that brings the account negative, you won't charge an overdraft fee, but if another item actually clears the account and it is negative because of that available balance, you may charge overdrafts. If we have a customer who get the overdraft due to a large hold by hotel or rental car company, we do refund the fees, but otherwise don't simply because they overspent. Make sense?

Makes sense- thanks!