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Overdraft Protection For Interest Bearing Accounts

Question: 
Several years back, when we set up our overdraft protection program, the decision was made to not allow overdraft protection for interest bearing checking accounts. This was done before my time and, looking back, nobody can remember exactly WHY this was done. Now the question of whether there are any compliance issues involved has come to me and I am afraid I cannot think of any reason why we can't do this. Are you aware of any reason why we cannot have overdraft protection on an interest bearing account?
Answer: 

Answer by Jim Bedsole:

If there are any prohibitions on this, there are a ton of banks that are in violation. I know of no prohibition againsthaving overdraft protection on an interest bearing account

Answer: 

Answer by Andy Zavoina:

Perhaps when that decision was made there was a systems limitation that prompted it?

I'm with Jim, I see no problems from a regulatory standpoint.

First published on BankersOnline.com 9/3/01

First published on 09/03/2001

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