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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