Commercial
Bank and
Trust Company
July 7, 2004
Federal Deposit Insurance Corporation
Attention: Comments
RE: Interagency Guidance on Overdraft Protection Programs
In response to the published request for comment Commercial Bank and
Trust Company, Paris, Tennessee is submitting the below comments.
At Commercial Bank we believe that the time frame of charging off overdraft
balances within 30 days from the date first overdrawn is to short a time
period. It has long been an established rule/practice that any overdrawn
account be charged off when the account has been overdrawn for 60 consecutive
days. This practice has worked for all accounts whether in an overdraft
protection program or not. This allows the financial institution to monitor
the account and determine the credit risk and also time to work with
the customer when there is a short term problem. We would like to see
the time frame be no less than 60 days.
Commercial Bank is against limiting the number of overdrafts or the
dollar amount of fees that will be charged against any one account each
day. This objection is from the stand point that the financial institutions
should not be told what to charge. Basically the objection is in the
principal of being told what to charge.
Commercial Bank believes that when a customer performs a non-check
transaction that might trigger the overdraft protection fee, a warning
and a cancellation of the transaction is not feasible. Many ATM systems
do not have the capability to provide a specific consumer notice and
permit the consumer to cancel the attempted withdrawal or transfer
after receiving the notice. A posted notice on ATM’s is a more
economical option.
Other than the items mentioned above the best practices are good and
we have them in place at this time. But the consumer will be hurt in
the long run if the guidance is so tight that the advantages of Overdraft
Protection Programs become non existent.
Thank you for allowing us to comment.
Deneicia Gregson
Senior Vice President
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