We have an overdraft program (non-Reg Z) and when a customer doesn't repay the overdraft within 30 days the service is suspended. If the customer "cures" the balance and makes a request the overdraft program can be reinstated. When the overdraft program is suspended, the opt-in acceptance is removed and then if the overdraft program is reinstated, the customer is sent out another opt-in disclosure. I am reviewing a deposit account and it seems the suspension of OD, removal of opt-in, reinstatement of OD and new opt-in is being done over and over again. Can the overdraft program be reinstated, but we just don't give the customer the option to opt-in again as possibly a way to mitigate the excessive use of the overdraft program? Or must it always be provided in conjunction with an overdraft program start/reinstatement (all this is assuming the customer has a debit or ATM card and can make one-time POS or ATM transactions on the account)?

Thanks in advance.

Review your program policy and disclosures to your customer. There should be some language that indicates the payment of overdrafts is discretionary. The bank is not required to offer an opt-in to honor one time ATM/Debit card transactions. Just remember that you cannot charge any fees associated with these transactions if they slip through and create an overdraft without the opt-in.

And, as many of us (including my friend Brian just above) have said many times, if the customer is a chronic mishandler of the account, you don't have to keep enabling that behavior. You can simply show the customer the door, and close it behind him when he leaves the bank. Let him be your competition's problem.