I'm sorry to ask such a simple question but we cannot seem to agree here on what needs to be disclosed as the ending balance (and thus the previous balance on the next month's statement)on our overdraft LOCs. Some say that it's only the principal balance while others believe that it includes the interest due (our methodology does not seem to fit the one described in the OSC at 7(a)(1)3). What ending balance are others disclosing?

The OSC for 7(a) is for home equity plans. Perhaps the better bet is OSC 7(b)(10)-3: "3. Accrued finance charges allocated from payments. Some plans provide that the amount of the finance charge that has accrued since the consumer’s last payment is directly deducted from each new payment, rather than being separately added to each statement and therefore reflected as an increase in the obligation. In such a plan, the new balance need not reflect finance charges accrued since the last payment."

Last sentence suggests that accrued finance charges exclude the accrued interest due...

I do not beleive that this method reflects how our plan works, hence the question about including the interest charge to the balance. If the borrower were to pay off the LOC on the same day as the statement is generated, the balance owed would be the previous balance plus any advances less any payments plus the interest charge.