Say a customer is writing bad checks to his employer and taking cash from the register, digging himself into Over Draft. Do we just keep rejecting the checks and hope he pays us our fees and eventually close him on excessive OD's... or do I go ahead and put a hold for collection on any funds coming in to his account, and close the account after giving him time to make arrangements for his ACH's?

I don't see any reason to wait. Start the closeout process immediately. If you are allowing a warning time before the account closing takes place, I would suggest refusing any check deposits from this customer, as you don't want to risk a return coming back to bite you after the account is closed.

You can close an account and in fact have a responsibility to close accounts that are knowingly writting bad checks. regardless of the customer reaching the banks number that defines excessive overdrafts. A bank owes this to the community in order to provide some sort of protection to merchants and others this person is writting checks to.

Closing should not be tied to collecting fee income. As far as ACH items thats the customers problem. It could be a month or two to get ACH items changed. Do you want the customer hanging around that long?

Close it now.

We've closed accounts for those exhibiting bad behavior to our staff and being disruptive and disrespectful in the lobby, not to mention bad behavior related to their accounts, especially if we suspect we could be on the losing end.

I'm relatively new in the banking world, so forgive the silly questions, but aren't institutions obligated to allow for time to make other banking arrangements?

Unless you have a state law that requires it, no. Also, before you close the account, check your disclosure to make sure that you are following your own contract. If you're using standard boilerplate language, you're probably safe closing the account right away.

Check you disclosures - most state that the institution may close an account to prevent a loss without any notice, otherwise a general 10 day notice to close may apply - Good idea to already have that language in your disclosures.

You need to fire that customer as soon as possible! The situation will probably just get worse and worse.