Can a bank's internal DDA account be in an overdraft position?

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Question:

Are there any regulations prohibiting a bank's internal DDA accounts from being in an overdraft position?

Answer:

That depends. If the "internal" account is for an affiliate, such as a holding company or sister company within the holding company, or a subsidiary, you may have problems with interaffiliate transactions prohibitions.

Take a look at the new Regulation W for some guidance if you find yourself with one of these overdrafts.

First published on BankersOnline.com 3/17/03