Regulatory Alerts2003-02-14
OCC Interpretive Letter #914 on Third-Party Overdraft Programs
The Office of the Comptroller of the Currency issued this letter to evaluate a third-party overdraft protection program and identify key compliance and supervisory requirements for national banks. The agency mandates that banks properly disclose overdraft fees as finance charges under Regulation Z, provide advance notice of fee changes under Regulations DD and E, and apply objective eligibility standards to avoid disparate treatment under the Equal Credit Opportunity Act. Additionally, banks must conduct rigorous vendor due diligence, secure balanced contracts that permit timely termination, and implement consumer safeguards to prevent deceptive marketing, excessive fee accumulation, and heightened credit risk.
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