My Bank is considering implementing a daily overdraft fee that would be assessed after a specific number of days overdrawn. Is any other financial institution currently doing this? If so, what concerns have your regulators expressed, if any?

Be sure that your system does not 'count' non-processing days when it determines when to assess the fees. The customer has no way to cure an overdraft on a day when the bank is closed, so you don't want to count closed days.

Make sure that you don't assess such a fee--

• if the only item that created the overdraft was a fee or service charge.
• if the only item that created the overdraft is an ATM or one-time debit card debit in an account without a Reg E §1005.17 opt-in.

"if the only item that created the overdraft is an ATM or one-time debit card debit in an account without a Reg E §1005.17 opt-in."

Or if multiple items created the overdraft and the account is brought back to an overdraft balance less than or equal to ATM or one-time debit card debit transactions.

Many banks charge a daily overdraft fee on days they are open for business. There is CFPB touted guidance from the FDIC's Kansas City office that explains the pitfalls. Here.

In each and every context, an overdraft is a loan and should be evaluated as such.

Personal opinion strongly held: A daily fee is about the time value of money, not a service, and should be subject to TILA and state usury laws. The agencies have not chosen to take that approach, but they are getting smarter all the time.

This may not be a factor in OK, but in line with Elwood's comments, CA courts can find a contract "unconscionable" and therefore unenforceable due to the interest rate even though usury laws regarding interest rates do not apply to depository institutions. And of course, the court gets to define what "unconscionable" is. A daily overdraft fee is seen as a finance charge on an extension of credit (again, as Elwood noted) so it can result in an extremely high interest rate and APR.

We used to charge a $5.00 daily overdraft fee after 5 business days; however recently stopped - within the past 3-4 months.

With ODP still a hot button and the acronym UDAAP thrown around like the word "and" is on a daily basis, I would strongly oppose implementing this as a new fee versus if you've always had it. I think an examiner would question the "why now". There are many other ways to generate fee income than with this IMO.

Also may want to check with State law, our state law does not allow this type of fee on a consumer account.