Our bank currently charges a per diem fee on account balances that are overdrawn. We are looking at setting a dollar threshold, say $1,000.00, for example, that if the overdrawn balance exceeds $1,000.00 we will charge the per diem fee AND interest on the overdrawn balance. [This is not connected with any overdraft protection product, and we do not have a "courtesy limit" for any accounts.] I contacted the state for an opinion about usury in this matter, and was told that they would not issue one. My question is...given that these are overdraft charges and not tied to any type of loan, would we be in violation of usury, or any other statute? [It is given that we would provide at least 30 days' notice to the depositors about the change.]
Your help in this matter is greatly appreciated.
[FYI...I had a similiar post in the Operations Compliance section...and decided to come here since I need to get down to the state specific level.] Thank you.

The regulators may not issue an opinion, but your proposed arrangement sure looks like interest on a loan. Assuming that the arrangement is a loan, then usury is one concern, several federal regulations mau also come into play. Your product appears to be open-end credit. The maximum interest rate is determined by the Tennessee statute under which you lend. You have a choice of statutes. I recommend the Tennessee Credit Card State Bank Statute. The statute basically allows any rate that you and the borrwer agree upon. You need to have some form of loan agreement and probably a monthly statement.