Read Reg O and still not sure if waiving a NSF for BOD is going to draw a red flag.... Operations called the director, it was a one time event and oversight. The funds were deposited the same day from an internal transfer to cover the unavailable funds.

Sorry, you must charge them to be in compliance on inadvertent overdrafts.

Regulation O

Sec. 215.4 (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:
(i) A written, preauthorized, interest-bearing extension of credit plan that specifies a method of repayment; or
(ii) A written, preauthorized transfer of funds from another account of the account holder at the bank.
(2) The prohibition in paragraph (e)(1) of this section does not apply to payment of inadvertent overdrafts on an account in an aggregate amount of $1,000 or less, provided:
(i) The account is not overdrawn for more than 5 business days; and
(ii) The member bank charges the executive officer or director the same fee charged any other customer of the bank in similar circumstances.

cricket: Here is a Federal Reserve Board Legal Interpretation regarding Reg O that might provide guidance if the circumstances are right: 1996 Legal Interpretation

Thank you for the link...

Ted, this interpretation sounds flawed to me. We basically have the same process because you don't know until the next day whether you're going to pay or return an item, however, the day the item was presented there were insufficent funds, consequently, the account is overdrawn. Unless their process is to do this for ALL customers (not charge them a fee if they deposit funds prior to their 2PM cutoff next day, I would say the director would have to be charged a fee or they have a Reg O violation.

It's an official FRB Legal Interpretation that's still on their website. I don't know all of the details of cricket's situation, but unless I misunderstood, cricket did say that the check was covered the same day, just as was the case in the letter. It sounds as though the issue addressed by the FRB is when an overdraft is actually considered as being paid.

I know, I'm just not sure I would agree with them. They admittedly called it an overdraft, and the reg's pretty clear on inadvertent overdrafts. I just think they missed it on this one.