COLUMBIA
COUNTY BANK
July 6, 2004
FDIC
To: Mr. Robert E. Feldman
Attn: Comments
550 17th Street, NW
Washington, DC 2042.9
Dear Mr. Feldman
This letter is in regards to Overdraft Protection Programs. We recently
implemented this program for our customers. In talking to several
of those customers, they have appreciated the convenience and the
fact that their check will not be returned to a retailer, which embarrasses
them and puts them on a bad-check list. They appreciate the fact
they only pay one fee per NSF instead than getting charged by both
the bank and the retailer, which also avoids the humiliation of making
good on a bounced check with the retailer.
By implementing
this service, we do not promote poor fiscal responsibility to our
customers.
We believe that errors do occur and we are providing
.a service to help those customers that do make those errors.
We do not market this service at the time the account is opened.
We have never advertised this service in any media and we do not
intent to do so. Once the account is opened for 30 days, we send
them a letter explaining the service, a policy and a opt-out letter
should they not want the service. This applies to all new accounts
unless we have seen that there is abuse within the 30 days since
the account was opened. The letter and policy clearly states how
the service will work, what costs are associated with this service
and when accounts must be brought back to a positive balance. Nowhere
in the policy or letter do we encourage them to use the service.
That is why we send out an op-out form for them to use.
Should a customer desire on overdraft line of credit, we will set
that up first before the overdraft protection service. With our system,
the customer can only use one or the other; not both.
As we do not
underwrite this service, we feel that any losses incurred by the
bank due to unpaid
overdraft balances should not be accounted against Allowance for
Loan and Lease Losses. Also,
we feel that those accounts with unused commitments should not
be shown as unsued commitments.
Again, as we do not underwrite this service, this service should
not be viewed as loans. It is a deposit service, not a loan service
in the way we have set up this product.
Sincerely
Larry W. Sisco
SVP/CFO
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