Answer:
A bank may not pay a director’s or executive officer’s overdrafts, unless:
(a) The overdraft is pursuant to a written, preauthorized, interest-bearing plan, specifying a method of repayment, or
(b) The overdraft will be paid by a transfer of funds from another account at the bank, and such transfer was pre-authorized in writing.
The overdraft restrictions do not apply to:
• Payment of inadvertent overdrafts on an account in an aggregate amount of $1,000 or less, subject to certain conditions.
• Overdrafts of a director’s or executive officer’s related interests.
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