Q: Is an institution required to terminate or suspend a customer’s access to the automated overdraft payment program if the customer engages in chronic or excessive use?
A: No Institutions are expected to monitor usage and engage in meaningful and effective follow-up to inform excessive users of available alternatives. However, as discussed in the Guidance, a number of risks are associated with chronic or excessive use of automated overdraft programs, including reputational, compliance, safety-and-soundness, and litigation risks. If such risks are identified during the course of an institution’s monitoring and oversight of an automated overdraft program, institutions should take appropriate action to mitigate risks, as has been the case in the past.
This can be found in FAQ IV-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