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#630458 - 10/26/06 11:06 PM Overdraft Limit
X Offline
Power Poster
Joined: Aug 2003
Posts: 7,332
The scenario: An overdraft limit is assigned to each account, for example $300. It's not a formal line of credit, it's not a loan and no interest is charged.

What will happen is a charge for $25 per check that results in an overdraft up to the assigned limit, plus $5.00 per day if the overdraft is not cleared by the 11th business day.

Question: The Fee Schedule discloses the $25.00 and the $5.00 charges. Is an additional disclosure required? If yes, why?


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General Discussion
#630459 - 10/27/06 01:14 PM Re: Overdraft Limit
CubDave Offline
Diamond Poster
Joined: Oct 2005
Posts: 1,562
What you are describing, X, is Overdraft Priviledge. I know there are disclosure requirements, but don't know what exactly since we chose not to offer it, even though the non-interest income potential is huge.

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#630460 - 10/27/06 02:56 PM Re: Overdraft Limit
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
Actually, I don't believe that including the two fees in your schedule constitutes promotion of the payment of overdrafts, even though you have established a guidance limit for accounts.

You appear to have a non-publicized overdraft program. Unless you trip up and promote the payment of overdrafts in some way (see our ODP Advertising Matrix Tool), I don't think you have added disclosure requirements based solely on posting these two fees in your schedule.
Last edited by John Burnett; 10/27/06 02:58 PM.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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