Communicating Alternatives to Overdraft Privilege

Financial institutions are expected to monitor excessive consumer Overdraft Privilege activity in order to advise customers of alternative options to cover overdrafts.

FDIC regulated institutions are expected to give customers who overdraw their accounts on more than six occasions where a fee is charged in a rolling twelve-month period a reasonable opportunity to choose a less costly alternative and decide whether to continue with fee-based overdraft coverage. Strunk also recommends that institutions not regulated by the FDIC also communicate available alternatives to ODP on an annual basis to accounts with insufficient funds items.

The hosted ODP Manager software includes a letter template which can be used to notify customers of the available alternatives to Overdraft Privilege. The alternatives, overdraft protection credit lines and/or overdraft protection transfers from a linked account, are both described in the letter including information about associated charges or fees and whether an application or request is needed to initiate coverage.

This Excessive Use Notification letter can be generated in ODP Manager based on criteria included in the daily extract file or as needed as an Ad Hoc letter. If the file imported daily into ODP Manager includes data from the core that indicates when an account has qualified for the letter by exceeding the threshold, the hosted software can automatically show when a letter is due. If the data is not available in the extract file, letters can be generated for each account identified using an existing core report or other method.

Whether the letter is generated based on criteria or as an Ad Hoc letter, the letter will be tracked for each account and retained within the hosted ODP Manager software.

Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more details about ODP Manager’s Excessive Use Notification Letter.