Can someone point me to a regulatory definition of overdrafts? We have a "discussion" going on here that is too riduclous at this point to share with the world at large!

Try referencing 225.52 - it may not fit your exact situation but it does provide a definition.

You could also try the Instructions for the Report of Condition & Income at
http://www.fdic.gov/regulations/resources/call/crinst/callinst2002. Not a regulation, but a good resource.

May also look to UCC 75-4-215 Final Payment, partial copy below:

§ 75-4-215. Final payment by payor bank; time when debits and credits become final; when certain credits become available for withdrawal.
(a) An item is finally paid by a payor bank when the bank has first done any of the following:
(1) Paid the item in cash;
(2) Settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement; or
(3) Made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearinghouse rule, or agreement.