Polling those BOLers who have Overdraft Programs (as defined by the Guidance not transfers or LOC), how many of you allow customers to overdraw their accounts at the teller line.

The Agency Guidance states that customers must be notified prior to initiating ODP and allowed to back out of the transaction and I am trying to decide the best way to comply with this when a customer wants to make a withdrawal at the teller line and the withdrawal would overdraw their account.

I fear that not only will we not be able to comply with the notifications properly but also by allowing customers to do this, will it be perceived by regulators as us promoting poor money management and thus lead to great risk of loss.

I've spoken to one bank that only allows ODP on checks clearing through normal channels. While I know this defeats the fee income purpose that prompted the bank to purchase an ODP product, I'm left to ponder the compliance nightmares that might abound if we do not limit it. Anyone have any input on this? Ran into any problems? Contemplated the same thing and decision that was made.

Please put my mind at ease!

I use to work for a large national bank. The teller screen would notify the teller that the withdrawal would overdraft their account and the teller would inform the customer prior to completing the transaction. I think as long as the teller notifies the customer, you would be fine.

We allow the customer to access their ODP at the teller window. If they cash a check accessing their ODP the teller gets a message. As a coutesy we give the customer a small notice that informs them they will be accessing their overdraft privilege. This gives them the opportunity to back out of the transaction if they wish to. We felt the written notice better protected their privacy and would cause fewer problems in case they were with a friend in the bank or at the drive up. This has been our practice since ODP began and so far so good.

Would it be overkill to add a "I understand that this transaction will require use of my ODP" space for customers to sign on something like that to return it? It would be nice to have something like this for the examiners to prove that you're doing it.

Thank you all very much. The paper notice is a great idea and the signature line is even better! Thanks for putting my mind at ease!

We include the available ODP balance in the available balance that customer may receive at the teller window. Customers can overdraw their account by conducting a withdrawal the the teller window. We have a form that the teller use when giving customers their balance. The form includes the current and available balance, a statement that the transaction may overdraw the account and the disclosures required by section 230.11.