employees and ODP

so most employees have accounts that carry $500 of overdraft protections.
the question has come up...if an employee uses their ODP - have they incurred a overdraft, because under our personel policy employees are only allowed a set number of overdrafts before they lose their account.

I guess really I am asking "should" odp count as an overdraft, as the bank has "given" them the odp product.

Based on your description, I would say no. It would not be until they went over their ODP limit, would they incur an overdraft.

my opinion is that the ODP keeps the account positive, so no OD has occurred. If you feel the need for clarity around this for employee accounts, suggest you have you HR department issue a policy statement around this.

Question for burgess: by "ODP" are you referring to a service that allows for a transfer from a savings or LOC to cover an overdraft? Or are you referring to a courtesy overdraft program (sometimes called bounce protection) that allows items to be paid into overdraft to a product-defined limit?

bounce protection product.

That's what I thought you meant. So use of the bounce protection feature would indeed create an overdraft of the employee's account.

Your question about whether or not these overdrafts should "count" against the employee in light of your policy is a good one. My suggestion is that the policy (which probably existed before bounce protection) needs to be updated to account for the existence of bounce protection.

Here's the approach we take. It may or may not work in your environment:
If the employee is eligible for bounce protection and has opted in to the servce, the employee is free to use it within the same parameters as any other customer. The same limits apply, and the same expectation that the account will be returned to a positive balance apply.

If the employee uses the overdraft service excessively (as defined by the FDIC guidance) and requires counseling (again- following the FDIC guidance)- the counseling is handled by Security, and HR is notified. Any account-affecting actions (such as removing bounce protection) are completed using the same parameters we apply to our other customers.

If an employee overdraws their accoutn in excess of their bounce protection limit, or if the overdrawing employee is not eligible for bounce protection, HR is notified of the overdraft, and disciplinary action in accordance with our policies would apply.

So in summary- in our policy, we do differentiate between bounce protection use and other overdrafts.

Thanks - that was very helpful

Just don't give it to employees and it satisfies all your issues. If they want to overdraft a checking account - tell them to go down the street.

Whatever you do, don't give it to an executive officer.

Our Reg O officers are not eligible for the Bounce Protection product