In the Overdraft Priviledge Joint Guidance, under the Safety & Soundness considerations, it states " The existence of the repayment plan, however, would not extend the charge-off determination period beyond 60 days as measured from the date of the overdraft". I just need some clarification. Does this mean if we put a customer into the repayment plan, we still need to charge off the account that has been overdrawn? Or can we put the amount overdrawn into the repayment plan, bring the account to a zero balance and allow the customer to use their checking account?

Why would you want to keep the account open?

To give them a 2nd chance.

Also, the repayment program payment is taken out of the account.

You have to charge it off unless the repayment plan is an actual loan - which would then be booked on your loan system.

I'm with PStalfort on this one. Why would you give anyone a second chance that has not been able to make good on the original overdraft within 60 days. Sounds like someone in a hole that doesn't know when to quit shoveling.

In a word - FEES!!!!

At least that's what the Bank I used to work for's philosophy was! In fact, in about 3 months they'd put them back into the overdraft program providing they had good behavior.

Duke

Same reason my former bank did the same...fees!

Thier feelings were, if they are going to pay fees to someone, it might as well be us!

Helping people get on firm financial ground was highly overrated with them.

Actually, the ODR Plan works well for us. Once an account is od for 30 days we evaluate the account and make a decision to either charge it off or offer an od repay to the customer. If the account has had regular deposits we will offer the od repay plan. We basically move the negative balance to a "shadow" account and allow the customer to keep their existing account. The ODR is set up on 4 monthly installments that are auto-debited from the checking account. During this time the account can not be overdrawn and has no courtesy od limit. The reason we do this is we have found it easier to collect the negative balance from the customer by doing this. If we charged it off and sent it to a collection agency we'd only get a portion of it, if any. There are no fees involved. Hope that made sense. By the way, we've had this in place for several years. We just went through an exam this year and had no problems.

Thank you so much Hollywood1. That is basically how our ODR plan works as well. I was wanting to make sure that would be okay with the examiners.