BANK OF DOOLY June 28, 2004 Mr. Robert E. Feldman
Executive Secretary
ATTN: Comments/Executive Secretary Section
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429 Dear Mr. Feldman: I am writing in response to the June 7th Solicitation for Comments on the Interagency Guidance On Overdraft Protection. Our bank does not presently have an automated overdraft program. The practice is, however, becoming fairly standard and I expect at some point we will explore this further. The major concern I have with the proposed guidance is the requirement to charge-off overdraft balances within 30 days from the date first overdrawn. Even without an automated program it is very common for accounts to remain overdrawn for several months while deposits are being made. From a bookkeeping standpoint it is much easier for us to keep up with the open accounts and pursue collection rather than charge them off Our policy is to charge them off when it becomes apparent there is a loss, just as we would charge-off loans which have a known loss. I do not believe there should be a deposits time frame but this should be left to the discretion of the bank examiners to insure that the bank has adequate policies and procedures in place to recognize loss and either charge it off or accrue for it under the appropriate reserve account. The one area not mentioned, which I believe should be disclosed, is the method by which items presented against non-sufficient funds are paid. Our bank pays the smaller items first which is substantially less expensive to the consumer than paying large items first as many banks do. It is also somewhat less expensive than paying by check number sequence as some banks do. It is my opinion that banks should continue to have the right to pay items by whatever method they choose. That method should, however, be disclosed as the average consumer does not understand these differences. I believe that overdraft protection should probably be offered on some systematic type basis.
There is no doubt, however, we should adhere to common best practices which do not encourage use of such overdraft facilities. Thank you for your interest in this area. Sincerely, G. Neil Joiner
President
Bank of Dooly
P.O. Box 365
Vienna, GA 31092
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