How do other banks approve customers for debit cards? Due to the increased potential for overdrafts, we have a policy of running a credit report and having a loan officer review each debit card application. I'm concerned we are being too conservative, and should offer the card to all checking customers. Also, it seems like a lot of added work considering the risk is not that high. After all, if they're going to overdraw they can write a check to do that! Are you doing what we're doing, or are you willing to take on the added risk and simply issue a debit card on all checking accounts?

It is split I believe, between banks that issue it to all and those who underwrite it due to the potential for an overdraft. If you have an overdraft program this becomes moot. The next question is one of holds. Some who underwrite don't hold the authorization requests and some who don't underwrite allow a 3 day hold or until the item clears.

We worked with our credit bureau to set the parameters for offering debit/atm cards. We do not offer to all checking accounts. Based on where they fit in the matrix, we may offer ATM only or we may offer debit card; the matrix also tells the new account person what the limits should be. The system is built in to our ChexSytems verification.

One thing to remember is that the bank can return an NSF check, however, once the debit card transaction was authorized, the bank can not return the transaction. If a customer went crazy, you would hot card them.

We had the same problem with lenders being to conservative in the decision process. They would set limits of $200 or $400 per day. Let's face it, you can't go anywhere for the weekend, stay in a hotel, eat out, shop a little on $400 (weekend is 1 day for processing). Since we loosened up and took the basic decisions out of their hands, we have had fewer problems. The officers can always approve a card or increase a limit if they want to.

We are a small community bank and we have all debit card applications approved by a loan officer accompanied by a credit bureau. They are approved almost exactly to the same standards that a consumer loan would be approved. Our management has taken the stance that a check is easier to return than a debit card item that was done electronically. Maybe we are at a time that we should be taking a look at being a bit more carefree with our debit cards, but this is the way that we have done it for years.

We have limits both on our Debit and ATM cards. We have certain critria they must meet. How well do you know your customer? Have they been an established customer with us? Do they keep a certain balance in their account? We do not do a credit report but we do have that option.

We're pretty conservative as far as banks go, but we do not do credit checks for debit card customers. We give them to any checking account holders 18 yrs. of age or older. And we issue them right away with no waiting period (other than normal processing).

We do have some losses, but as a percentage of income it's relatively small at 4%. As long as management understands that with this income comes some risk then reporting future losses may not be so painful.

And, if you're wondering, the majority of our losses come from lost/stolen cards. Not much of it is from customers going negative and not paying it back.