PEOPLES BANK
July 23, 2004
Jennifer J. Johnson
Secretary
Agencies of Governors of the Federal Reserve System
20th Street & Constitution Avenue, NW
Washington D.C. 20551 Re: Overdraft Protection Guidance Docket No. OP-1198 Dear Ms. Johnson: Thank you for the opportunity to comment on the proposed amendments to Regulation DD. I have worked in our bank for over thirty years and this is our fourth year in the Overdraft Privilege Program. I was very skeptical that this type of overdraft coverage was indeed a service to your customers, but after four years of the program, I am a true believer in Overdraft Privilege Program. We communicate to our customers very clearly the rules of the "Overdraft Privilege Program". We want them to understand our program and not think it is an easy way to access extra funds. To me, part of the success of this program is educating the customer. We monitor these accounts very closely. The customer is aware at all times the state of their account. We, of course, send overdraft notices as they happen, but the additional notices and letters are all part of this program. Overdrawn accounts are brought to my attention at 20 days, 35 days, 45 days and we close after the 60th day of being overdrawn. This is all done automatically, with notices and letters all being computer generated and a listing of all those sent out. I think most banks have some sort of unspoken overdraft limits they pay their customers up to; I know we had before we went into this program. This just allows us to tell our customer what that amount is. It is better for them and gives us more control of the overdrawn accounts. We also are treating our new customers equally to our established customers, by allowing the same type of overdraft treatment. I disagree with reporting the available amount of overdraft protection as an "unused commitment". This is a purely discretionary service to our customers. We, or the customer, may take this off their account at any time. There is no commitment or contract involved. The charge off of outstanding overdrafts at 30 days is too short. That had been our practice before we went into this program, but have now found that we are better able to collect on these past due accounts if we extend it to 60 days. The extra 30 days has allowed us to work with our customers toward bringing their account to a positive. Please consider these comments from someone who has worked exclusively with this program for four years. It has been beneficial to the bank, but more importantly, it is benefit to our customers. Thank you for your consideration.
Sincerely,
Deb Goyen
Deposit Officer
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