FDIC Federal Register Citations

PEOPLES BANK

From: Al Vermeer [mailto:AlV@peoples-ebank.com]
Sent: Friday, July 16, 2004 9:36 AM
To: Comments
Subject: Overdraft Protection guidance

Although we do not have or plan to offer a formal Overdraft Protection program, I have a couple concerns about proposed guidance recently issued. First, I believe that 30 days is to soon to be required to charge off an overdrawn checking account. We have several instances where customers incur a significant expense, overdraw their account and then pay it back over time. Thirty days is only one or two paychecks, generally not enough to make up a balance of any amount. Requiring charge off at 90 or 120 days (similar to consumer loan rules) would be more realistic. Second, I am adamantly opposed to any additional reporting or disclosure requirements that may be brought about to banks who do not have a formal Overdraft Protection program by this guidance. Customers already are inundated with disclosures that they don’t understand and don’t care about. Requiring more would only confuse and frustrate them, not protect them. Third, it would not be technologically feasible to provide a notice of any actual or potential overdraft fees prior to the completion of the transaction. In fact, it may be to the customer’s detriment to do so. For example, a customer may have a deposit being posted to an account today and still be told that they will be assessed a fee for an ATM withdrawal when in fact they would not.

In summary, I would encourage you to not penalize banks who do not offer Overdraft Protection programs because of those who do. We view our payment of overdrafts as a service to our customers without taking undue advantage of them. Implementing various aspects of this guidance would cause us to be more restrictive in our payment of overdrafts, thereby lowering the level of service to our customers.

Al Vermeer
President / COO
Peoples Bank
Rock Valley, IA 51247
712-476-2746