We are needing to write a policy that addresses "charge-offs" on the deposit side. If anyone is willing to share we would appreciate it.

This is something we would be interested also.

Are you looking for the criteria set for charging off a DDA? If so, our bank charges off negative accounts that have not had a deposit in 60 days.

Bi-weekly at officers meeting, accounts OD 30 days or more are reviewed. We then send the customer a letter giving them 7 days to make a deposit or contact the bank. We then charge off the account and turn it over to ChexSystems for collection.

Very few accounts that have been OD 30+ days make a deposit and resume a satisfactory status. We usually wind up charging them off. If an account makes a deposit and then goes back to their old ways, we send them another letter stating that they are not handling the account in a satisfactory manner and close the account.

We are a small rural bank

We also send out letters after the account has been charged off. We give them an additional 20 days (the account has already been closed) to pay the debt. The letter states that if it is not paid it will be turned over the ChexSystems and a Collection Agency. We get a pretty good response from the letter we send. We have a lot of people who get paid once a month (social security, etc), so I'm glad we use the criteria of 60 days from the date of the last deposit. I work the overdraft accounts pretty heavy. I have a daily list of overdraft customers that I call. We are using the Overdraft Honor program with Bank Strategy group and that is going very well for us.

That last post was from me. I'm at home and forgot to register before replying. Can you tell I love my job or what???

I can understand the charge-off after 60 days, but please tell me, do you notify the customer
that the account's been closed?

We send the customer a series of letters (10 day, 20 day, etc). If the account is still overdrawn after 30 days, we do send the customer a letter informing them that the account will be closed as of (date) and all items presented against the account will be returned (like we haven't already been doing that). We also state in the letter(s) that the derogatory information will be reported to a "nationwide credit reporting agency".

By all means send notification, certified mail return reciept requested, that the account has been closed, to the customers last known address even if you know its not a good address.

If checks are written against a closed account it becomes a criminal charge rather than a civil offense. Depending on the dollar amount of items returned on the closed account,it could be a felony.

we discontinued to send accounts to ChexSystems for collection.

we send them to a local collection agency that in 11 months has out preformed what ChexSystems did in 2+ years. our fee is less and they collect more. thus our recoveries at the bottom line look better.

we work the account with letters and phone calls. if the customer is willing to repay the debt we make payments arrangements, if not, we charge them off as soon as we can.