FDIC FAQs-What is an "occassion" where a fee is charged?

Compliance > Deposit Operations > Overdraft > FDIC FAQs

Q: The Guidance states that FDIC-supervised institutions should monitor programs for excessive or chronic customer use, and if a customer overdraws his or her account on more than six occasions where a fee is charged in a rolling twelve-month period, undertake meaningful and effective follow-up action. What is an “occasion” where a fee is charged?

A: An “occasion” occurs each time an overdraft transaction generates a fee. For example, this would include a per-transaction overdraft fee or a daily fee for an outstanding overdraft status. As a result, potentially more than one “occasion” can occur per day. If three overdraft fees are charged as a result of three transactions (even if the fees are aggregated), that would constitute three occasions. If a fee itself triggers an overdraft, that event would count if a further overdraft fee is charged as a result.

By contrast, overdraft items paid where no fee is charged (for example, if a bank pays an item after a daily limit is met on overdraft items paid and the bank waives additional fees) would not be included. Thus, if four overdrafts occur in a day but the bank only charges three fees as a result of a per-day limit on fees charged, this would constitute three occasions.

This can be found in FAQ II.1 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



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