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#877191 - 12/21/07 03:28 PM Commercial Overdraft Charge Offs
Rubaiyat Offline
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Joined: Jun 2001
Posts: 1,373
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Can anyone direct me to information regarding when a commercial overdraft should or must be charged off? I'm also particularly interested in any guidance that the OCC may have issued on this.

I've done some research and everything I've found is pretty murky on this issue. I'm hoping someone might be able to guide me to some more helpful information.

Thanks!
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#877241 - 12/21/07 03:59 PM Re: Commercial Overdraft Charge Offs Rubaiyat
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 75,723
Galveston, TX
Charge-off should happen 60 days from when the account first went overdrawn.

Excerpts from the Joint Guidance on Overdraft Protection Programs

"All overdrafts, whether or not subject to an overdraft protection program, are subject to the safety and soundness considerations contained in this section."

"In addition, overdraft balances should generally be charged off when considered uncollectible, but no later than 60 days from the date first overdrawn."
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#877244 - 12/21/07 04:03 PM Re: Commercial Overdraft Charge Offs rlcarey
Rubaiyat Offline
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Joined: Jun 2001
Posts: 1,373
Lido Deck
Couple of questions about that:

1. This isn't an "overdraft program" where this occurred.
2. Does it make a difference that this is a commercial customer and not a consumer customer? I found an older guidance that discusses 120 days but only for consumers.

Do either of these two things make a difference with regard to the Overdraft Program Guidance?

(Happy Birthday, by the way!)
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#877260 - 12/21/07 04:10 PM Re: Commercial Overdraft Charge Offs Rubaiyat
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 75,723
Galveston, TX
No difference that I am aware. Safety and soundness concerns - as stated in the guidance - are across the board and the regulators do not diffentiate between consumer and commercial overdrafts.
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