Answer by Andy Zavoina: I don't believe there is a "one size fits all" or best practice. If you hire a customer who relies on an overdraft privilege program once in a while, should they be "penalized" because employees are held to a higher standard?
I have seen "employees will not overdraft", "employees will not be overdrawn more than X days in any 6 months" and enrollment in the privilege program like any other direct deposit customer.
What works for your bank? The bottom line is to not have any abuses from employees or officers in either days in the negative or amounts.
Answer by Bob McComas: Here is a policy statement you can use as a guideline.
Employee Checking Accounts (All employees)
As an employee of the bank, you will be provided with a checking account with no service charge. The new accounts supervisor can help you select the right account for you. Basic styles of checks are furnished to you free of charge. Payroll deposits will automatically be made into your account at your option. The account may be held jointly with another person if you desire.
All employee accounts must be maintained in strict accordance with bank rules and regulations. Do not attempt to bypass proper banking procedures or use your position with the bank to delay or defeat a valid financial obligation.
Abuse of an account may result in returning of all future checks presented against insufficient funds, cancellation of checking privileges, payment through a savings account with no checking privileges, or more serious disciplinary action.
Employees who write checks against non-sufficient funds will be charged the same amount per item as our customers and may be asked to discuss these items with the President.
Answer by John Burnett: Be certain to include references to applicable sections of Regulation O for executive officers. You absolutely don't want these folks going OD.
First published on BankersOnline.com 04/5/04