If an executive officer writes a NSF check and then makes a deposit to cover it, the same day it shows up on our NSF report, do we have a problem if we have paid the check? I understand that there is a problem if we have waived the NSF fee, but since the money was there to cover the check are we allset to pay?

If it's less than $1,000 and an isolated event, I wouldn't worry about it since it was covered the minute it was discovered. Charge the fee though.

If you offer a check protection line of credit I would try to be sure that everybody covered by Reg O had one as well, just offer it on the same terms as are widely available to all employees.

I'd pay it as you would any customer. Don't waive the fee. The accounts was a technical (daylight) overdraft but since you could have returned the check(s) your books shouldn't have shown it as an OD account.

We encourage (strongly) that every director have a savings account attached to their checking account (as an automatic transfer) to cover any overdrafts which they may inadvertently cause.

Andy, I was always under the impression that an overdraft on this mornings report was actually from yesterday so this would be a true overdraft. Am I thinking incorrectly?

The mornings report should be what was presented last night and has to be paid or returned today. So while it was NSF last night when presented, it is paid against good funds on deposit today.

You might stretch and think of it as a delayed, manual OD protection plan. The item is presented. It is NSF. A deposit was called for to cover the payment. The deposit may come from another deposit at the bank or somewhere else. It may be done in a second, or a few hours.

That said, this could be a dangerous play. It should not happen often or be routine. If it is, there is a bigger problem to address as calling someone to tell them a deposit is needed is time consuming and can be unreliable if they are not reachable.

This was a procedure often employed years ago before we had ATS accounts and lines to draw from.

I understood from the post above that the check was presented and the deposit was simply delayed. I had this happen years ago. I borrowed money and made my purchase. The check was presented that day, but the loan deposit was held up or rejected. Technically I had an OD. It wasn't my fault and the item was good the next day, but technically not when it was presented.