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#2085030 - 06/24/16 02:29 PM DAILY OVERDRAFT FEE CHARGED ON WEEKEND
Banker23 Offline
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Joined: Mar 2013
Posts: 17
If a bank charges a $5 daily overdraft fee after the 3rd day...... the weekend does not count as one of the three initial days to bring the account current because customers would not have the opportunity to make the account right if it is not a business day.

However, after those initial 3 days are over and the customer continues to be overdrawn and it falls into a weekend or even a weekend with a holiday...the customer would be charged $5 for each of those days. Does anyone feel like this would be viewed as a problem?

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#2085060 - 06/24/16 03:29 PM Re: DAILY OVERDRAFT FEE CHARGED ON WEEKEND Banker23
John Burnett Offline
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I think the same argument could be made: Because the bank doesn't post transactions on weekends or holidays, the customer would not have an opportunity to "stop the bleeding" by making a deposit on a Saturday or Sunday (or holiday), so why is the customer penalized for not curing the overdraft on those days?

Even if that argument doesn't hold up, it's important to note that some of the banks that have had problems with assessing penalties on non-business days have had disconnects between their customer communications (disclosures, brochures, advertising, etc.) and the actual operation of their systems. Or they have failed to explicitly say that fees would be imposed for non-business days when the balance remains negative.
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#2085131 - 06/24/16 05:48 PM Re: DAILY OVERDRAFT FEE CHARGED ON WEEKEND Banker23
Banker23 Offline
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Joined: Mar 2013
Posts: 17
Thanks, John. I have done some reading and couldn't really find any information for banks that were penalized for this as long as, like you mentioned disclosures, etc. reflected daily fees were charged per calendar day and not business day, however, I suppose this could be interpreted based on an opinion, but understand it could leave room for an argument. Thanks!

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#2085264 - 06/25/16 03:06 PM Re: DAILY OVERDRAFT FEE CHARGED ON WEEKEND Banker23
Elwood P. Dowd Offline
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Elwood P. Dowd
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Posts: 21,939
Next to Harvey
CFPB touted guidance from the FDIC's KC office.

If you think it's fair try your argument out here. wink
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#2086518 - 07/03/16 04:23 AM Re: DAILY OVERDRAFT FEE CHARGED ON WEEKEND Banker23
Inspector Offline
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Joined: Apr 2016
Posts: 283
Banker23 - Take a look at the newsletter Ken linked to, I believe you will see similar newsletters for other FDIC Regional Offices as well.

I have some unfortunate experience with this. As John said, if the consumer cannot "cure" the OD over the weekend it presents a problem. Its not so much that you charge on the weekend when the consumer does nothing but if a consumer makes a deposit on a Saturday and you don't process the deposit until Monday and charge a fee for both Saturday and Sunday that is where you will get into hot water.

Quick summation, if the consumer is overdrawn all weekend and doesn't attempt to correct the OD then charge for each day. If the consumer does make a deposit that would correct the OD on the weekend, don't charge if the only thing that keeps the consumer OD is the bank's inability to process on the weekend.

Theoretically, you could disclose that you would get those extra charges due to processing but it would need to be specific to avoid the deceptive UDAP angle and you could still get an examiner that would think about unfairness.
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