Fee Procedure for Overdraft Supervisory Guidance

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Question:

The FDIC's Overdraft Supervisory Guidance says that institutions are expected to have procedures and policies in place by July 1, 2011. I am trying to understand if a fee is charged on the sixth occurrence, but waived three weeks later. Does an institution need to adjust the occurrence count back to five? Does waiving of the fee need to occur at the time it is charged for the overdraft?

Answer:

I know that compliance officers want answers to nit-picking questions just like this one. I often find myself asking questions just like it. But in this case I have to respectfully suggest that you don't need to go there. The FDIC's Guidance doesn't get down to that level of detail, and neither does the FAQ that the FDIC posted on April 1. I sincerely doubt that an examiner is going to be concerned whether a fee was waived or not and when.

I also know that just because I've assumed that an examiner will be reasonable, your next examiner will nit-pick you to death. So what I suggest is that you set up in your procedures how you'll handle a fee waiver in your management of the "6-in-12" expectation, then follow them consistently.

First published on BankersOnline.com 5/23/11