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Bank Employee Checking Account OD Protection

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Are bank employees, other than executive officers, allowed to have overdraft protection on their checking accounts under Reg O?

Regulation O only addresses insiders (significant shareholders, directors and executive officers). It does not cover other employees. If your bank determines that it wants to offer overdraft protection to its employees, it may do so. As part of the decision-making process, I recommend that management impose the same fees on employees as it does on customers. Employees who don't feel the pain of overdraft fees may make unwise money-management decisions. Management should also consider whether it wants its employees to be subjected to the same potential for getting in over one's head in overdraft debt as its customers are exposed to. There is, after all, a reason behind some bankers' belief that employees should be held to a higher standard than customers when it comes to managing their accounts.

First published on 12/08/08

First published on 12/08/2008

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