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#2063503 - 02/10/16 04:30 PM Customer Withdrawing from Overdraft
MyOhMyWeComply Offline
100 Club
Joined: Sep 2015
Posts: 111
Texas
Should customers be allowed to personally withdraw funds from their overdraft funds. We do not allow them (anymore) to withdraw cash but we allow them to make checks payable to others for bills. They are charged the a fee when going into their overdraft and this is disclosed before the transaction ends.

Here is an example I hope will help the understanding of my question.

Customer comes into bank and withdraws checking account to 0.00 in cash. Customer knows she has $700.00 overdraft protection so she has the teller cut a check for $700.00 made payable to a local payday lender. Her account is now negative $730.00. Should we be allowing this at the teller line?

Thanks in advance for assistance. If time permits, I would appreciate any cites from regulations, or whitepapers showing where this is either acceptable or not.

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#2063544 - 02/10/16 05:37 PM Re: Customer Withdrawing from Overdraft MyOhMyWeComply
Timeline Offline
100 Club
Joined: Dec 2011
Posts: 115
I would ask what your agreement says. We specifically disclose that we will not overdraft the account with withdrawals made at the teller line.

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#2063579 - 02/10/16 06:22 PM Re: Customer Withdrawing from Overdraft MyOhMyWeComply
Bottle Caps Offline
New Poster
Joined: Jan 2016
Posts: 10
Agreeing with Timeline - check your institution's agreements and disclosures. At my bank we do allow customers to withdraw off of their bounce protection (we also have an overdraft protection, which is an overdraft LOC and totally different). However, they are charged the standard NSF fee for doing so and are made aware of the fact that they will be charged, and can only do it so much and up to a certain amount. Abuse of bounce protection or going over their bounce protection limit (for example, say we give them $600.00 in BP, they cash a check for $500.00 under their bounce protection, but then write a $300.00 check to the utility company too, which results in the overdraft being more than the BP will cover, especially if it's a common occurrence) results in it being revoked.
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"Some of the most wonderful people are the ones who don't fit into boxes." -Tori Amos
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Opinions are my own.

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#2063625 - 02/10/16 07:40 PM Re: Customer Withdrawing from Overdraft MyOhMyWeComply
MyOhMyWeComply Offline
100 Club
Joined: Sep 2015
Posts: 111
Texas
Thank you for your assistance! It is greatly appreciated

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#2063650 - 02/10/16 08:16 PM Re: Customer Withdrawing from Overdraft MyOhMyWeComply
Naise Offline
Member
Joined: Feb 2014
Posts: 91
We also allow it and have a little notice that the tellers are required to provide which outlines the fees, states the posting order, says there may be other fees aside from the one incurred by the teller transaction if other items process that day, and a few other things. It's provided right before the transaction is complete, which gives the consumer time to change their mind.

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