What type of disclosure do we give when lowering a loan reserve limit (overdraft protection)? Our loan reserve line of credit amount sometimes gets lowered or removed entirely based on how the customer maintains their deposit account. Any help is appreciated.

Lowering the available credit would be adverse action requiring an AAN unless it's being done due to delinquency on the account.

It's usually done when someone consistently uses their entire line and still gets overdrawn. We lower the credit limit or close the reserve account. So are you saying in either case we'd have to give an adverse action notice? If so, does this have to be given a certain time prior to lowering the amount or can it be done afterwards?

It appears you are taking adverse action based on the DDA account OD history and not he delinquency or default of the ODL account.

This would be adverse action requiring an AAN. You can take the AA before sending the notice but it should be sent under the guidelines of 202.9(a)(1)(iii).