Hello. I just recently completed an audit on negative shares and overdraft protection. I am new to this position and I have a mentor that I have been working with regularly. We do conference calls, emails, and visits once a month. Upon electing this area to audit, he pointed out the highlights that I should be aware of when testing. The main thing was that a negative share should be charged-off within 45 days if the member has not deposited funds into the account or obtained an approved loan to clear up the negative. I noticed when doing my testing that we were averaging 48 days. I brought this up with my mentor and he said that it was a finding because Federal Regulation 12 CFR §701.21(c)(3) states there must be a cap on allowable overdrafts consistent with the Credit Union’s loss tolerance, established fees and interest rates, and a requirement to remedy deficiencies in fewer than 45 days. Internal policies and procedures must ensure that the current process is in compliance with these Federal regulations. The department that had the finding is arguing that they don't have to do anything with the negative shares until 60 days. What does everyone else follow?
Thank you
Susan
