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#1683275 - 03/28/12 06:39 PM Ad Hoc Overdrafts
Compliance Lover Offline
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I know the Joint Overdraft Guidance pertains to automated overdraft payment programs and that if you only have ad hoc overdrafts you should still be careful about payment order, but should you also follow the guidelines about counseling when they are overdrawn more than 6 occasions in a 12 month period, and the bullet point about having daily limits on overdraft fees and having a de minimis amount that will not incur an overdraft/NSF fee?

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#1683296 - 03/28/12 07:09 PM Re: Ad Hoc Overdrafts Compliance Lover
cheech Offline
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We were told we did not have to. We try to do a little better than minimum so we ordered a pamphlet from FDIC (something like how to avoid overdraft fees) and send them out quarterly with the NSF notices. As an educational item for our customers.

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#1683300 - 03/28/12 07:13 PM Re: Ad Hoc Overdrafts Compliance Lover
manimal Offline
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If you decided not to implement some of the items in the guidance, just be prepared to tell examiners why. Not that you are guaranteed retribution for not doing everything in the guidance, but they will probably want to know about your decision-making process. Is it a cost factor? A system issue? Etc.
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#1683304 - 03/28/12 07:16 PM Re: Ad Hoc Overdrafts manimal
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So you're saying we should comply with the guidance in all areas even though we don't have an overdraft payment program?

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#1683311 - 03/28/12 07:22 PM Re: Ad Hoc Overdrafts Compliance Lover
manimal Offline
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I'm saying that examiners will want to know why you decided to do (or not do) the things in the guidance. We do not have a formal overdraft program, but decided to implement some of the items in the newly released FDIC guidance. Sometimes we were limited by what our core system could do, and we made sure to document that and have everything in a file. That way, we won't be shrugging our shoulders saying "I dunno" when the regulators are here.

My own personal opinion: I'd recommend complying with as much of the guidance as you can, based on your systems, the cost of complying, and the type of overdraft activity/program you have at your institution.
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#1683345 - 03/28/12 07:46 PM Re: Ad Hoc Overdrafts manimal
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Do you have a per day limit on NSF fees? For example, if a customer has 10 NSF items on the list, do you charge a fee for each one?
What about monitoring the customer who has more than 6 occasions of overdrafts etc.?

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#1683350 - 03/28/12 07:50 PM Re: Ad Hoc Overdrafts Compliance Lover
manimal Offline
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Yes we limit the number of transactions that will be subject to a fee each day. We also set up a partially automated/partially manual system to alert customers who have had more than 6 overdraft occasions. Part of the research we did was talking to our core system to see what enhancements they were offering to help us comply with these guidelines.
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#1683387 - 03/28/12 08:27 PM Re: Ad Hoc Overdrafts manimal
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Ok, thanks.

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#1683392 - 03/28/12 08:31 PM Re: Ad Hoc Overdrafts Compliance Lover
manimal Offline
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If you want to talk specifics, feel free to PM me. Just don't want to broadcast everything out here in the forums.
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