Smart Solutions

Courtesy Overdraft Privilege

What makes an overdraft privilege program successful? 

There are many pieces to a successful program…

• Compliance with State and Federal Regulations
• Written overdraft policies and procedures
• Analyzing deposit base to establish conservative limits
• Software for overdraft tracking and collection letters
• Program brochures and disclosures that meet regulatory requirements
• ATM and POS access that meets regulatory requirements
• Employee training which meets Best Practice recommendations
• Management reports to monitor risk and revenue performance

SmartStep Solutions provides the tools and experience to implement a solution to meet all areas of a successful overdraft program.      

Overdraft Privilege is a non-contractual service offered by financial institutions, which is designed to help consumers who occasionally overdraw their checking account by paying items up to an established limit.  The account holder pays the standard NSF fee per item but may avoid additional costs associated with returned items, such as merchant fees and late fees.  

In addition to traditional lines of credit and/or sweep features, Overdraft Privilege provides an added safety net for all consumers who keep their checking account in good standing without requiring an application or pre-qualification.  As long as the checking account is kept in good standing, the account owner may continue to have access to the overdraft privilege limit; however, because the program is non-contractual the financial institution is not obligated to pay any items.