| MARION BANK
August 2, 2004
Robert E. Feldman
Executive Secretary
Attention: Comments
Federal Deposit Insurance Corporation
550 17 Street, N.W.
Washington, D.C. 20429
Via e-mail: Comments@FDIC.gov
Subject: Proposed Guidance with Request for Comment
Interagency Guidance on Overdraft Protection Programs
We are pleased to respond to the FDIC request for comment concerning
proposed Interagency Guidance on Overdraft Protection Programs. The
Marion Bank has offered an ODP program for the past four years and has
received positive reactions from our customer base on the occasions it
has been used to meet their financial needs or errors in their
checkbooks.
We believe in a customer-friendly approach that’s based on safety and
soundness standards requiring prompt notifications to the customer of
the overdraft and an encouragement to bring the account to a positive
balance as soon as possible. We support a longer charge off policy than
the 30 days proposed and recommend that 60 or 90 days would allow for
the reasonable collection of a depositor account.
Our institution currently monitors its overdraft losses and makes
appropriate provisions. Our position is that the reporting requirement
on available amounts should be reserved only for contractually binding
obligations such as traditional overdraft lines of credit or other
formalized credit facilities.
We would like to express our concern that a failure to comply with
any individual best practice would not normally be considered worthy of
an examination criticism as long as management had documented its
“consideration” of the practice and demonstrated good reasons for not
implementing it. The proposal could be problematic because examiners may
use the individual Best Practices as checklists to determine compliance
with the Guidelines using a “line-by-line” approach rather than as a
general guideline for best practices worthy of management consideration.
Thank you for the opportunity to comment on the proposal.
Sincerely,
Cynthia L. Sparling
SVP/COO
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