If a director is a secondary owner on a relative's checking account, and that account was overdrawn for seven business days, is this a Reg. O violation?

I would opine - yes, unless your records can prove he is not an owner. What's a secondary signer? Do the account records indicate that he is only a signer and has no ownership???

I agree with Randy. If there is ownership of the account there is responsibility. If the insider is a "convenience signer" with no ownership, than no.

To answer your question, the director is actually more than just a signer. Instead of "authorized signer", the records indicate he is "secondary owner", and the account is titled [relative's name] OR < [director's name]. I found a Reg. O reference about joint accounts between executive officers and their spouses, but was not sure how the overdraft rules applied when a director was added as a joint owner on another individual's account.

I would vote that yes, you have a problem. He IS an owner and Reg O applies to this account.

Often a child, parent, or other relative wants to have the director on the account in case of emergency, but it is just not worth the hassle. Remember, you can not give that owner any additional consideration if the director is on the account. For example, waiving an NSF fee, etc.

Be sure to document OD and include in your report to BOD or audit committee (check this, I think this violation has to be reported to board). Also, you could attach OD protection to account to prevent future problems.

You have a violation of Reg O. The director needs to get off that account after it has been cleared and the fee has been paid. It is just a hand slap if it was inadvertant and isolated. An examiner may ask why it was not cleared for 7 days.