So, I would imagine there's been some discussion and/or guidance on this, but I can't find it.

We make OD decisions 'ad hoc' at our bank. We do not offer to let customers 'opt in' to pay overdrafts.

The President wants to cancel the cards of a couple of customers who have been abusing their POS privileges by playing the system (pay at the pump overdrawing them, etc). Can we do this and call it 'account abuse'?

Thanks.

There are no regulations that govern the cancellation of debit cards since it is not a credit product. In fact, a lot of banks will not re-issue debit cards if there have been too many questionable Reg. E claims.

You do not even need to call it "account abuse", you can just inform the customer that the bank is cancelling their card because the customer has not handled the use of the card in a satisfactory manner.

Thanks for the confirmation

You probably should have a written procedure for this - IMO your regulators will take a dim view if do this to some customers but not all - I think consistency will be a key factor.

Seems like I heard this addressed somewhere, but cannot find my materials - I'll keep looking.

Good idea...we've done it very sporadically in the past, but I wasn't sure if the new debit card OD rules should be impacting our decision-making process at all...

Just don't mention in your procedures that the action is taken because you haven't received an opt-in to OD fees for card transactions. You apparently haven't offered the opportunity and don't intend to, but you also don't want to be cited for taking action based on no opt-in.

Make it all about account or card mismanagement.

We also have included on the debit card application the following: "Property of the Issuer; Cancellation Rights:
Each card is the property of Issuer and must be surrendered upon demand. Each card can be canceled by Issuer and the privileges thereof revoked at any time without prior notice"