We have decided to discontinue our Discretionary ODP program and are having a bit of discussion if it requires a Change in Terms disclosure 30 days prior. Any thoughts? Thanks

Pulling the plug on such a program is not something you should do without a notice to affected customers, even if there's no regulatory requirement to do so. I'd aim for an explanatory notice 30 days before flipping the switch. Statement notice or separate mailing, your bank's choice.

Any concern that when we give notice that there may be a run on use of the ODP?

We are in the same position timberlane. We have had our ODP product for just 3 months but it has been a disaster. We want to end it but are worried about people realizing it is ending and running up their limits. Are we required to give 30 days notice? We have so few people using it I would hate to put the bank in a potentially dangerous position just for an advanced notice.

but are worried about people realizing it is ending and running up their limits

I guess this mentality really confuses me. I don't overdraw my account because I do not want to pay the fees and you think just because you are going to end quazi-agreeing to pay an overdraft for me that I am going to overdraw my account?????

Believe it or not it happens. In the last 3 months we have had customers that have qualified for the program (required deposits, etc.) max out their OD limit and just walk away from the account. We have sent them to collections and reported them, but I know of many that already have accounts at other local financial institutions and some are just using Walmart money center instead of a bank. I doubt we will ever collect what is owed. Desperate people at Christmas will do crazy and confusing things.

Of course it happens. They are either going to do that or they are not. I doubt you are going to see a flood of activity because you say you are ending the program.

When you start a program like this, you should realize the risks and weigh whatever increased income you might expect against the increase in losses that you are going to experience. If you think you can run a program like this without experiencing a large increase in losses, then someone sold you a bill of goods when they recommended that you start the program.

Much of this all depends on the sufficiency in which you screen your new customers and your past customer base before ever opening an account for them. You don't open accounts for deadbeats and hope to beat the odds this time around.

If you are trying to end a program 3 months into it, someone didn't do their homework.

I agree. Management was fleeced and our Core processor didn't hold up their end of the bargain. We are just trying to end this as peacefully and painlessly as possible. I currently have 21 people actively using their ODP funds. I will recommend that we give a 30 day notice and hope that things go smoothly. Thank you for your input.

I assume that this ODP program you're ditching is discretionary. If it is, you didn't surrender control over your check returns. And if you see someone looking like he or she is about to run off the rails, you should be able to pull the plug without a 30-day warning. That is, of course, unless your program stated you'd provide such a notice.

For the record, I am in favor of providing notice, with the understanding that you can probably put the brakes on anyone who seems to be inspired to lose control.