Would someone give me a clear explanation of the differences between regulatory amendments and regulatory guidance? I know they are not the same, but it seems that the regulators put just as much store in the guidance as the regs. Are they just "best practices" or are they requirements?

In my opinion ... it depends. If it's guidance that relates to an interpretation of existing laws or regulations ... then you better follow the guidance. However, other regulatory guidance is provided as a "best practices" guide for institutions to consider.

I often see similar situations to the observation you provided. If an institution is not following the guidance ... and assuming the institution is not operating in an unsafe and unsound manner as a result ... you should be fine. I always find it helpful to evaluate the guidance ... determine if it's feasible for your operations ... and if not ... then be ready to explain your justification for not following the guidance (e.g., other mitigating controls in place, insignificant consequences of non-compliance, etc.).

Thank you for your insight. We are going to start advertising our bounce protection product and along with the Reg DD requirements there is the "Guidance" that was published at the same time.

The Interagency Guidance on Overdraft Protection Programs includes best practices, safety and soundness considerations, etc. I have not seen the regulators require a bank to follow any of the recommended guidance ... (yet) ...

I did see one instance where a bank had several checking accounts that had been overdrawn in excess of 60 days ... but their policy was to charge-off overdrafts after 90 days. The regulators encouraged bank management to evaluate the Interagency Guidance in regard to the bank's existing risk management practices ... but in the end ... the regulators indicated the bank's practice was acceptable.

Daze & Confused is correct on this...it depends. In the specific case of the bounce protection guidance, though, I can tell you that this is guidance put forth in an effort to have the banking industry regulate itself. This type of guidance usually comes out because someone or group, e.g., community groups or Congress, are clamoring for or are considering more regulation of the industry on this matter. So, the regulators sometimes try to head off that regulation, not because we are cheerleaders for the industry, but because we don't believe a new law or regualtion is always the best answer to a perceived problem. AR.