Q: Do the specific supervisory expectations about customer contact apply to ad hoc overdraft payments?
A: No. The FDIC’s November 2010 Guidance is focused on assisting institutions in identifying, managing, and mitigating the particular risks posed by automated overdraft payment programs. Ad hoc overdraft payments have been authorized by banks for years as an accommodation based on specific considerations and knowledge of a particular customer, and they have generally not been the subject of the type of product over-use concerns that can be associated with automated overdraft programs. Consequently, the specific supervisory expectations set out in the Guidance regarding customer contact for excessive or chronic users of automated overdraft payment programs do not apply to ad hoc overdraft practices.
This can be found in FAQ I.2 of the FDIC’s Overdraft Payment Program Supervisory Guidance FAQs. The FAQs can be found at: http://www.fdic.gov/news/conferences/overdraft/FAQ.html