Notifying Customers Of Overdraft Line Of Credit Use At The ATM

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Question:

The FDIC examiners are here! I am being told that we should disclose to our ATM customers on the ATM screen when their ATM transaction is accessing their overdraft line of credit. I could not find this requirement in any regulation anywhere and they could not give me anymore of an answer than "it would be a good idea." Is this usual or is someone overstepping their authority? We do mail the customer a notice each time they access funds from their overdraft line of credit whether the transaction took place at the ATM, teller line, POS or thru the inclearing.

Answer:

It's likely that what you're hearing is an examiner's concept of a good idea, and probably not anything that's risen to the level of an FDIC concept of a "best business practice." If the latter status had been attained, it's likely the FDIC would have issued some kind of official comment by now.

At any rate, the comment will probably not end up in any part of your examination report. If it does, it most definitely should not make the "apparent violations" section. While the idea may have merit as a business practice, it isn't required, and there may be significant reasons (cost, technology, etc.) that your bank might decide not to adopt it.

Before you get your back up with the examiner, find out where he or she is going with this. It may be nothing more than a thought to be shared with you. If that's so, you're likely to be getting lathered up over nothing here, and copping an unnecessary attitude with the examination team.

First published on BankersOnline.com 05/5/03