ABA Urges FDIC to Rescind Overdraft, Deposit Advance Guidance

In response to the FDIC’s recently announced initiative to streamline its Financial Institution Letters and other communications, the American Bankers Association in a comment letter on Wednesday urged the FDIC to withdraw its supervisory expectations with respect to bank overdraft payment programs and to rescind its 2013 guidance on deposit advance programs. ABA noted that the overdraft FIL and deposit advance guidance have limited customers’ access to valued, bank-provided services for meeting small dollar emergency expenses and other liquidity shortfalls.

ABA also recommended that the FDIC work through the Federal Financial Institutions Examination Council to update the FDIC’s third-party risk management guidance to reduce the potential for inconsistent supervisory treatment and mixed policy signals regarding bank engagement with nonbank partners, particularly those offering new technological solutions.