Bank Employee Overdraft

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Question:

What is the law/reg regarding overdrafts on bank employee checking accounts? From time to time we won't charge a good customer (long time customers who rarely have overdrafts) an overdraft fee. Since we do this for some customers can we do the same for a bank employee?

Answer:

The only regulatory restrictions with regard to employee overdrafts relate to overdrafts of those individuals who are considered "executive officers" of your company. These executive officers are covered by Reg O restrictions on overdrafts outlined in 12 CFR 215.4(e). Overdrafts for other employees would typically be covered in your HR policies and/or employee handbook. There are no regulations that I'm aware of that would prohibit you from waiving an overdraft fee for a non-executive officer employee.

First published on BankersOnline.com 1/22/07