We are exploring the option of offering early direct deposit credit to our customers and in trying to do research of areas of concern or regulatory issues I am not finding too much information. From other banks that are offering it, it appears to vary such as included with all account products or limited to a certain product offering. Some banks require you to sign up, and some it is automatic if you have a direct deposit.

Questions that have surfaced in our discussions are in regards to interest and if anything is impacted with how that is credited or disclosed? And if this impacts the overdraft program usage?

Is there anything else that we should be considering before moving forward?

Thank you

just some thoughts:

-no regulation currently against it, but Nacha is exploring a Nacha Rule that puts the liability to the RDFI if a reversal is sent through and there are no funds available prior to the original effective date

-trying to pick and choose account type or product to get this will be problematic

-requiring sign up will be problematic, think of the effort to add each client independently and how much manual effort that entails

-if you give them credit interest should accrue from that date of deposit/access to funds

-be prepared to discuss with your clients why the last 3 have come on wednesday but today it came on thursday, and why the bank only posting 1 day early instead of 2 made me OD my account (even though i'll assume if you do it you will disclose it it based on when originator sends, but people will forget that part and you'll be the evil bank)

We are looking into offering this service as well. One of the debates is hard post/ memo post. Anyone offering this that would be willing to share what you are doing?