Employee Overdrafts

I need opinions regarding whether a national bank is subject to §524.710(2) which prohibits employees of a "state bank" from being overdrawn without a checking reserve or written agreement to transfer funds.

While arguably a national bank isn't a "state bank", a national bank IS subject to other sections of this code such as safe deposit boxes, etc.

Any thoughts?

I would think (personal opinion) that a National Bank is exempt from this.

In any case, an OCC examiner is unlikely to care unless the overdraft involves Reg O, is > 60 days overdrawn, or bank management is not sensitive to the embezzlement risk such overdrafts raise.

I see that you are located in Georgia. Have you had experience with Iowa law? Just curious.

None. Do have plenty of experience with the OCC, though.

Would it make a difference if you waived the fees?

We are a national bank located in Iowa, and until recently did allow ODP on our employee accounts.
However, you should consider this: Due to employee abuse and potential related risks, we have gone back to the "old days" where employees do not have access to ODP but can (a) contract for auto-transfer from another account or (b) apply for an overdraft line of credit. Other than that, after x overdrafts, your supervisor has a discussion with you, then warnings, then loss of account, etc.