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Documentation: Increase Overdraft Line of Credit

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If we increase an overdraft line of credit (unsecured) limit, what documentation do we need? Does the customer need to sign anything? Do we have to do a whole new loan or just document it in the file?

An overdraft line of credit is a formal extension of open-end credit that happens to be linked to a transaction account. Whether you need a new agreement or can increase the line by informing the customer (as with a credit card line increase) is something that state law could affect. I recommend you consult with local legal counsel.

First published on 06/03/2018

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