Not only that, but unplanned overdrafts in which the account has been continuously overdrawn for more than 30 days or more must be reported as past due loans on schedule RC-N.
While charging ODs to ALLL has been under GAP for some time, many banks were taking it to operating losses. The regulators reiterated the proper way to handle OD charge-offs in the 2005 OD guidance document:
"With respect to the reporting of income and loss recognition on overdraft protection programs, institutions should follow generally accepted accounting principles (GAAP) and the instructions for the Reports of Condition and Income (Call Report), and NCUA 5300 Call Report. Overdraft balances should be reported on regulatory reports as loans. Accordingly, overdraft losses should be charged off against the allowance for loan and lease losses."
_________________________
The opinions expressed here should not be construed to be those of my employer:
PPDocs.com