I have been reviewing the FDIC’s recommendation to bank’s ODP programs and have not found where NSF fee limitations are discussed. However, during a management meeting our credit officer told the attendees that NSF fee will be limited to 6 in a 12 month rolling period and then she went on to talk about the counseling and other FDIC guidance as they all will apply equally to ODP “and” NFS fees.

Am I missing something? From what I have read the guidance appears (to me) to visit the ODP fee issue and does not address NSF fees.
Our FI charges the same fee for ODP as it does for NSF. Base on the assumption a FI follows the guidance verbatim, I see that once 6 ODP fees are charged and should the consumer continue to write checks, for example, and the bank begins to return those items, there is no limit discussed in the guidance to the number of NSF fees that can occur.

Am I on the right track in my understanding?
Thank you friends

I agree that NSF fees are not currently covered by the guidance.

Let's see how long it takes for THAT to change!

I hear Ya...

Consider this:
We limit our habitual OD customers to 6 in 12. Being “habitual” and some (irresponsible), they continue their course (which you know they will) and write checks that now we have to return NSF.
What do they become? Hot check writes!!!
In an effort to help the habitual OD consumer, the FDIC guidance, if followed verbatim, will turn these consumers into criminals. Thus, the proverbial finger-pointing will swing back around to the “Big Bad Meany-Banks” and again it will be our fault. Then comes more restrictive regulations to correct the problem they created by further over-regulation in the first place.
Now, in no means am I saying that all banks have been fair and not corrupt in their ODP program. However, the overwhelming majority have the ODP programs to provide a service to customers that if used responsibly can keep them out of jail or at best, off the DA’s list of “Hot Check” writers and maintain respect with merchants they conduct business with.
(IMO)

You have definitely stated the obvious there.....LOL!

In most states you break the law when you write a check against insufficient funds, period. You get away with it if your bank pays the check.

We do not offer Overdraft Protection Programs..only pay customers in overdraft at bank's descretion, does the FDIC guidance still apply in this case? Where can I find the guidance?

From the guidance.

...automated overdraft payment programs, which are established programs, often partially or fully computerized, that are used by institutions to determine whether non-sufficient fund (NSF) transactions qualify for overdraft coverage based on pre-determined criteria.

It's totally irrelevant whether or not your bank promotes overdraft services or offers overdraft protection plans. If you make pay or return decisions via an automated method or manual method which makes the decisions objective and consistent, the guidance applies to your bank.

Thanks, Ken

When reading the guidance I noted page 2 under "supervisory Expectations" refers to "ad Hoc" overdraft payments typically involve irregular and infrequent occasions on which a bank employee exercises discretion in a specific instance about whether to pay an item or not, as a customer accommodation and not on a pre-determined or formulaic basis. Such ad hoc activites are not the focus of this guidance." Would these not be the same a discretionary overdraft programs? I am trying to determine we will need to have a program in place to monitor excessive or chonic overdraft customers.

Well said, Diputs. Another consumer protection effort that hurts the consumer.