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#809341 - 09/05/07 04:46 PM Reg CC & Overdraft Protection - Repeated Overdraft
Compliance Heifa Offline
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Up on the Roof in Texas
We have an advertised ODP program for our customers that has been in place for a couple of years. I was wondering what the groups opinion was on using the Reg CC Repeated Overdraft Exception Hold when a bank has one of these programs in place. On one hand the bank is providing this program to allow the customer to overdraw their account for a fee and then we can place a hold on deposits if they do use the program repeatedly. I have not been using this exception hold in my bank due to this program for fear of examiner criticism. Any comments or suggestions would be appreciated. Thanks.

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General Discussion
#809427 - 09/05/07 06:05 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft Compliance Heifa
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Georgia
Can you - yes. Should you - Sounds inconsistent if you are using ODP as a fee generator.

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#809431 - 09/05/07 06:08 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft SavannahOne
SavannahOne Offline
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Georgia
Expansion on regulator issue - should not be a problem as ODP is "an automated version of a manual process". If you can use Repeated OD in a manual program without criticism you can use it with ODP.

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#809432 - 09/05/07 06:11 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft SavannahOne
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I was told by one examiner that if we were to use the Repeated Overdraft exception reason for one customer then we need to use it for all customers who would fit that category - in other words, once you determine that one deposit account holder who overdraws six times in six months (or whatever the parameters are) is a repeat overdrafter and deposits are subject to holds then EVERYONE who falls in that category becomes a repeat overdrafter and their deposis are held.....
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#810005 - 09/06/07 01:34 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft I Wear Many Hats
LoisLane Offline
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Originally Posted By: Kate & Tim's Mom
I was told by one examiner that if we were to use the Repeated Overdraft exception reason for one customer then we need to use it for all customers who would fit that category -


I disagree with the examiner because the important variable with a deposit by a repeat overdrafter is the reliability of the check being deposited.
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#810820 - 09/06/07 10:25 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft LoisLane
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I agree with Lois. There are other considerations. Still, I would stay away from the perception that you encourage ODs and penalize them for it on the other hand.
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#811261 - 09/07/07 04:13 PM Re: Reg CC & Overdraft Protection - Repeated Overdraft Andy_Z
Compliance Heifa Offline
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Joined: Sep 2001
Posts: 182
Up on the Roof in Texas
We do not encourage OD's and penalize them. In fact our policy and disclosure states that the product is not to be used as a line of credit. I was just wondering if there could be criticism due to change in Reg DD regarding ODP programs. In my mind, there seems to be a conflict between how many times you use the program and being a repeated overdrafter for exception holds. I guess using the product on six banking days during the preceding six months could constitute excessive use. The $5,000.00 or more on two banking days would definitely be grounds since our ODP limit is not near that amount. I wonder when other banks take away the ODP for excessive use? I guess that's another thread! Thanks for your help.

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