Overdraft and Courtesy Payments

Legal scrutiny against financial institutions relating to overdraft practices is on the rise, according to industry sources. Most actions against banks and credit unions involve allegations of improper fee assessment, unclear or misleading terminology used on account agreements, and violations of opt-in requirements.

To maintain full compliance and avoid possible legal consequences, credit unions must make sure all account agreements, marketing materials and on-going communications provide clear, consistent messaging regarding fees, processing and procedures. This session will cover overdraft rules under both Regulation E and Truth in Savings, as well as best practices for risk mitigation.

Covered Topics

  • “Traditional” and “Courtesy Pay” overdraft programs
  • Opt-in rules for ATM and “everyday” debit card transactions
  • Required disclosures
  • Actual balance vs. Available balance
  • Policies and procedures
  • Advertising requirements
  • Best practices
  • Risk mitigation

Who Should Attend?

This session is designed for the compliance area, deposit operations and management officials who are responsible for implementing overdraft programs.