Regulatory Alerts1998-02-01
Regulation No. 2 - Overdrafts by Officers and Employees
The Alabama Superintendent of Banks, with the concurrence of the State Banking Board, promulgated Regulation No. 2 to enforce restrictions on bank overdrafts for directors, executive officers, and employees. State-chartered banks must ensure that overdrafts for directors and executive officers comply with Federal Reserve Board Regulation O, while overdrafts for non-executive officers and employees must adhere to the bank's standard written policies, fee structures, and risk assessments applicable to other customers. This regulation became effective on February 1, 1998, to ensure that extensions of credit to bank insiders do not exceed normal repayment risks or offer more liberal terms than those available to general customers.
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