A business owned by a Director had two items come in and overdraw his account. We paid the items and overdrew the account by $70 dollars which was covered next day. We charged him two NSF fees. His wife is "asking" that we refund the NSF fees. Can we do this without causing a reg o violation?

No.

Thanks for the answer. I wish the regulations were as clear as your response.

Tell the wife that the OD caused an brief unsecured loan to the director - to treat his unsecured loan any differently than other customers, causes the bank to be in violation of a major director related regualtion.