Reg O - NSF Fee Refund

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Question:

I see a lot of guru Q and A's regarding directors and overdrafts and overdraft fees. My bank's policy is to exempt all directors from our overdraft protection program, so that we don't have to worry about Reg O issues on that score, but my question has to do with a plain old ordinary non-sufficient funds fee. Is it a Reg O violation to refund an NSF fee?

Answer:

214.5(e) Overdrafts. (1) No member bank may pay an overdraft of an executive officer or director of the bank or executive officer or director of its affiliates on an account at the bank, unless the payment of funds is made in accordance with:

(2) (ii) The member bank charges the executive officer or director the same fee charged any other customer of the bank in similar circumstances.

First published on BankersOnline.com 6/29/09