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#2259488 - 09/09/21 09:08 PM Overdrafts
Anonymous
Unregistered

I have some questions about overdrafts: https://www.fdic.gov/news/events/overdraft/faq.html#q2

1. Would a standard approach be reviewing customers with, let's say, more than 3 overdrafts in a month to see if there is a pattern of behavior?

2. That these overdrafts would be three or more calendar days in a calendar month where one account would have an overdrawn balance?

3. Should we look across multiple accounts owned by a client (e.g. three separate accounts for the same client were overdrawn for one day in a month)?

4. Does the dollar value matter? E.g. would three $1 overdrafts be considered as abuse?

5. If the FDIC wants a bank to contact their client when there is abuse, what message would the Account Officer normally convey?

Thanks.

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#2259490 - 09/09/21 09:33 PM Re: Overdrafts Anonymous
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 76,929
Galveston, TX
Where are you getting three? And it is only an overdraft on which you charge a fee, so if you do not charge for overdrafts under $25, they do not count.

The Guidance states that FDIC-supervised institutions should monitor programs for excessive or chronic customer use, and if a customer overdraws his or her account on more than six occasions where a fee is charged in a rolling twelve-month period, undertake meaningful and effective follow-up action.
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#2259515 - 09/10/21 02:44 PM Re: Overdrafts Anonymous
Anonymous
Unregistered

Sounds like there is one "trouble" customer.

Do you seriously assess an OD charge if a customer is overdrafted by $1.00? Tell me which bank to stay away from!

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#2259517 - 09/10/21 02:45 PM Re: Overdrafts rlcarey
Anonymous
Unregistered

Originally Posted by rlcarey
The Guidance states that FDIC-supervised institutions should monitor programs for excessive or chronic customer use, and if a customer overdraws his or her account on more than six occasions where a fee is charged in a rolling twelve-month period, undertake meaningful and effective follow-up action.

Has this been updated since Covid? I imagine banks have been a little bit more lenient?

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#2259535 - 09/10/21 04:15 PM Re: Overdrafts Anonymous
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 76,929
Galveston, TX
There really have been no updates in the last 11 years.
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#2259566 - 09/10/21 07:00 PM Re: Overdrafts Anonymous
InFairness, CRCM Offline
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InFairness, CRCM
Joined: Nov 2010
Posts: 542
USA
The only real updates have been the number of banks offering "no overdraft" accounts, not any changes in regulatory positions.
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