Skip to content

Request OD Protection Again After Reg D Violation

A customer's savings account is set up to protect his checking via overdraft protection and he has violated Reg D for three consecutive months and the bank has removed the overdraft capability, following all requirements of course. When can he or can he request overdraft protection from his savings to his checking again?

Answer by Randy Carey: That is the bank's call. There is no guidance.


Answer by John Burnett: In making that call, I suggest it would be wise to have a standard procedure or practice in order to avoid criticism from examiners and auditors. As part of such procedures, the customer should be reminded of the limits imposed on transfers from their savings or money market deposit accounts and informed that exceeding them again will result in permanent loss of transfer access. Branches should be informed of the procedure and it should be enforced centrally.

As Randy said, there is no official guidance on the question, but your bank should avoid making it too easy for customers to gain reinstatement, or its compliance controls over the transfer limits could be deemed ineffective.

First published on 4/1/13

First published on 04/01/2013

Filed under: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics