| ALLIANCE
BANK
July 20, 2004
Robert E. Feldman, Executive Secretary
Attention Comments
Federal Deposit Insurance Corporation
550 17th Street, N. W.
Washington, D. C. 20429
Re: Interagency Guidelines on Overdraft Protection Programs
Dear Mr. Feldman:
I have read the above referenced guidance and have a few comments
about it. First, I will say that our bank has been offering overdraft
privilege to our customers for the past six years. Most of them are very
appreciative of our service and are glad that they are not paying
additional fees to merchants for returned checks.
The following are comments I would like to make on the proposed
guidelines:
Charged Off Overdraft At 30 Days: This issue has been
carefully considered and we have created a collection process designed
to minimize our losses and maintain our customer base. Our collection
process includes periodic contact with our customers, which helps us
determine which customers want no clear up their overdraft charges. This
process has worked for us and doesn't create any significant risk for
our bank. We would argue that overdrafts be allowed to age up to 90 days
prior to being charged off. Many of our customers are paid semi-monthly
or monthly, therefore it takes time for them to clear the overdraft.
Unused Commitment Reporting: This requirement would not help
our customers in any way and would only create additional paperwork.
Many of our customers never use their overdraft privilege, they want it
for a cushion in case they have an insufficient check.
Free Account Disclosures: Our disclosures explaining Overdraft
Privilege are given to the customer before the account is opened. They
clearly explain the terms and fees for the account. The fee is the same
if the check is paid or returned and there are no additional fees for
the Overdraft Privilege account. Additionally, all advertising complies
with Regulation DD.
Notice Upon First and Subsequent Overdrafts: We always provide
customers with prompt notice of checks paid which cause the customer to
have an overdraft. Additional information proposed in the guidelines is
unnecessary and would serve no purpose.
I appreciate the opportunity to comment on this proposed guidance. If
you have any questions, please feel free to call.
Sincerely,
Thomas C. Sellers
President/CEO
Alliance Bank
Sulphur Springs, TX 75483
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