Our Deposit Officer wants to create a consumer HELOC sweep. This account would establish a target balance in the checking account with the excess swept to the customer's HELOC at the end of the day. If the customer needed funds to get back to the target balance after paying checks the HELOC would be drawn upon. There is some discussion about what the target balance will be, could be $0, could be $500, $1,000 - whatever.
The intent is customer oriented - interest rates are low, customers are earning nothing on their deposits, so they might as well use their balances to pay down their HELOCs.
I've found nothing to forbid this type of account, however the FDIC's guidance on overdrafts has me concerned that this type of account could be frowned upon. We would not charge a fee for paying any checks, but technically if the customer had checks presented that were greater than their target balance it would create an "overdraft" until the HELOC funded the account back to the overdraft limit.
Am I being too paranoid of the guidance? Any comments, suggestions, or hints on places to search for suggestions on this?
TIA
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