Answer:
Accounting principles require that any overdraft be deemed uncollectable and charged off if the account has been overdrawn for 60 consecutive days (45 days for credit unions). There are no exceptions for COVID. If the institution wants to change off the overdraft, but keep the account open, it may elect to do this. Any payments made to the charged off balance must be recorded as a recovery.
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Learn more about Brian Crow’s webinar The Maze of Overdraft Compliance
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