Thread Options
|
#80681 - 05/15/03 08:11 PM
Bounce Proctection (Overdraft Protection)
|
Anonymous
Unregistered
|
I thought I read something recently that led me to believe that overdraft protection plans are getting increased government scrutiny. Am I just thinking about Reg Z commentary? Am I imagining this? If not, can someone give me a link to a recent article on this. I think I read it in the last week or so, but cannot find anything.
|
Return to Top
|
|
|
|
#80682 - 05/15/03 09:51 PM
Re: Bounce Proctection (Overdraft Protection)
|
Power Poster
Joined: May 2002
Posts: 3,608
Near the Land of Enchantment
|
Do a search under overdraft protection, bounce protection, etc. There have been many threads on this forum, with good information in them in the last few months.
_________________________
Opinions my own.
|
Return to Top
|
|
|
|
#80683 - 05/16/03 12:41 AM
Re: Bounce Proctection (Overdraft Protection)
|
Anonymous
Unregistered
|
No, no, no. I don't want information from months ago. I have probably read any threads you are talking about. I am thinking about something that was very recent--maybe from the FTC??? Maybe it was a nationally distributed newspaper article. Oh well, thanks for trying Lestie!
|
Return to Top
|
|
|
|
#80684 - 05/16/03 04:40 AM
Re: Bounce Proctection (Overdraft Protection)
|
Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
|
The latest ABA Compliance magazine (or was it the general ABA magazine) had a number of articles on the pros and cons of "Bounce Protection."
IMHO - the bottom line is HOW you market the product.
If you are aggressive and ENCOURAGE your customers to write NSF checks so that you can charge them $25-$30 per check, do splashy statement stuffers that highlight the benefits, and if you include the amount of the "bounce protection" in their balance when they go to the ATM, then you are asking for the regulators and the activist groups to pin you up as the next poster child for predatory "pay day" style lending whose only goal is to suck up those non-interest fee charges from the most vulnerable of your customer base.
IF ON THE OTHER HAND, you have a low-key approach - for instance when you pay a check, you send out a notice along the lines of "We understand that mistakes can happen, and perhaps you were not aware of the balance in your account, but since you are a valued customer we honored the check by overdrawing your account. We charged you the same $29 fee to overdraw your account as we would have charged to bounce your check, but this saved any embarrasment or addtional charges with the party to whom you wrote your check. Please make immediate arrangements to deposit funds to your account to repay the overdraft.
What would be nice then is to have escalating messages on the notices that would encourage the customer to seek credit counseling if they are experiencing financial difficulty.
Finally, IMHO, you should designate a portion of the income from this program to donate to legitimate non-profit credit counseling agenicies, or a home owner eduction program, or any other CRA-type program to benefit low/mod-income people.
Think of it as a "sin tax" to fund preventive programs.
_________________________
CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
|
Return to Top
|
|
|
|
#80685 - 05/16/03 12:55 PM
Re: Bounce Proctection (Overdraft Protection)
|
10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
|
Bonnie, When are you going to run for Congressperson? Sounds like you have a jump on new legislation regarding this product
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#80686 - 05/16/03 02:52 PM
Re: Bounce Proctection (Overdraft Protection)
|
Platinum Poster
Joined: Mar 2003
Posts: 770
|
I have an editorial from the April issue of the ABA Banking Journal. It references a cover story on page 32. Another article gives banks tips for offering the product. These aren't technical, but a good starting point.
|
Return to Top
|
|
|
|
#80691 - 06/02/03 07:08 PM
Re: Bounce Proctection (Overdraft Protection)
|
Power Poster
Joined: Jun 2001
Posts: 6,153
|
Check out the May 20th American Banker Community Banking Cover Story. "Bank Overdraft Programs Rankle Consumer Groups."
_________________________
Better a patient man than a warrior, a man who controls his temper than one who takes a city
|
Return to Top
|
|
|
|
#80692 - 06/30/03 02:54 PM
Re: Bounce Proctection (Overdraft Protection)
|
Anonymous
Unregistered
|
would denial of an overdraft protection on an account require an adverse action notice to be sent to the customer. OUr statement stuffer concerning this product encouraged customers to apply for the service.
|
Return to Top
|
|
|
|
#80693 - 06/30/03 03:08 PM
Re: Bounce Proctection (Overdraft Protection)
|
10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
|
If you are talking about the denial of an advance under a prearranged written credit plan, an adverse action notice would be required.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#80694 - 06/30/03 03:37 PM
Re: Bounce Proctection (Overdraft Protection)
|
10K Club
Joined: Oct 2000
Posts: 27,748
On the Net
|
If you mean you did a credit check, ChexSystems, etc. and decided not to provide the service an FCRA notice would be required.
As Randy noted, if it is a true credit product, a Reg. B AAN would be needed as well.
_________________________
AndyZ CRCM My opinions are not necessarily my employers. R+R-R=R+R Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell
|
Return to Top
|
|
|
|
|
|