We are having a problem getting our account processing vendor to make programming changes to allow us to separately identify fees for paying overdrafts and fees for returning items. We have always applied an "overdraft item fee" regardless of whether the item is paid or bounced. Our vendor tells us that we aren't required to make the change because we don't offer an overdraft protection plan. Where, specifically, in the regulation does it say we have to make this change?
If we do not advertise payments on overdraft, do we still have to make changes on our statements to include fees for returned and paid items?
We are a small community bank of less that $75M regulated by FDIC. We offer no Overdraft Protection other than the "sweep account" from another deposit account. What new Reg DD changes would affect our bank?
Regulation O prohibits banks from paying overdrafts on a executive officer or director unless they have a preauthorized transfer agreement. What does Regulation say about overdrafts to employees? Is this a management decision as to paying or returning employee overdrafts? What is considered best practice? Also, if an employee overdrafts an account but he has overdraft protection (through a bounce protection program), when do we consider him overdrawn? Would it be before overdraft protection kicks in or if he shows a negative balance after overdraft protection?
If there is a checking account with a sole owner, and the customer wants to tie an overdraft protection line to the account; would it be a problem to have a co-signer for the line who is not also listed on the checking account?
We are currently working on an ODP Policy and Procedures. It was stated that an account should be charged off no later than 60 days. We do our charge offs monthly. Do we have to change our method or can we charge them off the last day of the month even if it passes 60 days?
Our bank does not have an overdraft protection program, however, we do, as a courtesy to our customers, make pay or return decisions on a case-by-case basis. We charge a fee for NSF items that are paid and a fee for NSF items that we return, however, the fee we charge for NSF paid items is $5 more than the fee for NSF returned items. Because we charge a larger fee for NSF paid items, is this fee considered a finance charge under Reg. Z?
Some questions recently arose about our OD protection plans and how they affect certain accounts that we offer.1. Our senior age is 50. Should we raise that to 62 or do we need to charge them the same for club checking that includes OD protection that we do for our other club members? 2. How does Reg Z affect the OD repayment plan? We offer customers 3 or 6 months to repay us.
Is it required that we send notification of overdrafts that take place. We did make note of it on our quarterly statement that we would no longer doing this. Are we in compliance?
We are in the process of implementing an automated overdraft protection service. As a courtesy, the Fair Lending folks at the FDIC spoke with us regarding "guidance" on this service. Specifically, they told us that if we have any checking products that are age-based (such as 50 years plus checking) that has a waived service charge that we are discriminating against all other accounts holders that have an account that is not aged base and has a service charge or a minimum balance requirement. The violation would fall under ECOA. We were told the only way that we would be in "guidance" would be if the aged based account was 62 years plus. We asked them to site specifically "where" in the Reg B or in the joint guidance that this is stated. Apparently this is very broad guidance. Has anyone else come up against this situation or been written-up in an exam for this? Any advise as to our next move?