Our Position

Deposit Account Services


  • ICBA strongly supports a consistent legal and regulatory framework for deposit account services and deposit-alternative accounts (e.g., prepaid cards) that gives community banks flexibility to provide a variety of services to meet consumers’ financial needs and affords non-bank consumers the same transparency and protections bank customers receive.

  • ICBA opposes any requirements that would dictate a community bank’s deposit account screening and/or closing procedures.

  • ICBA strongly urge policymakers to cautiously consider the potential consequences of any future overdraft legislation and regulations, which would have a negative ripple effect on customers who rely on overdraft services.

  • Overdraft legislation in its current form would also harm many businesses that receive regular payments by check or allow customers to schedule automatic recurring debit payments—such as insurance or car payments. Pending overdraft legislation would create a significant spike in these transactions being declined or rejected. This would be extremely costly to merchants and cause customer confusion.

  • Overdraft rules restricting banks will not address or stop fees for missed or late payments levied by merchants, utilities, landlords, and other payment stakeholders.

  • Government regulations should continue to distinguish between ad hoc overdraft payment and automated overdraft payment programs to ensure that banks can continue to meet the varied financial needs of their customers.

  • Overdraft legislation and regulations should not require community banks to punish their customers by restricting access to services of convenience that meet their account needs.


Community banks offer many deposit account services to address a variety of consumer needs. These are designed to protect consumers from the harmful consequences associated with payday loans and non-traditional loan products.

Examples include a variety of overdraft payment programs, in which the bank analyzes an overdrawn account for payment, and alternative services, in which customers can choose to transfer funds from a designated account or line of credit or to advance funds from a short-term, small-dollar loan to avoid an overdraft. Most community banks leverage their knowledge and relationship with the customer in making overdraft payment decisions and operating their overdraft programs.

Overdraft services are an important aspect of community banks’ relationships with their customers. Community banks leverage their personal knowledge of their customers to determine the best way to educate them on the right overdraft program to suit their needs.

Increased regulatory and legislative scrutiny of consumer overdraft payment programs has affected many aspects of how community banks offer these services to consumers, as well as how they monitor and manage these services. Yet, despite this regulatory landscape, most community banks continue to offer the service to fulfill consumer demand for overdraft coverage.

Over the last several years, a variety of e-commerce transactions capable of causing overdrafts now include, not only ATM and POS debit transactions, but also online and mobile POS transactions generated by an ever-increasing number of merchants and service providers.

As a result, community banks have continued to expand the features of overdraft payment programs they provide to consumers because when overdrafts occur, it is generally in the consumer’s best interest for their bank to pay items/transactions rather than returning the items unpaid and triggering returned item and various payee fees levied by merchants, utilities, landlords, and other creditors.

Overdraft restrictions would force many community banks to stop offering overdraft services to their customers, which would result in significantly more bounced checks and declined debit card transactions—leading to unnecessary credit rating harm, merchant late fees, or fees for returned items for these customers. Such restrictions would also harm businesses receiving regularly scheduled payments by creating a spike in these transactions being declined or rejected.

Staff Contacts: Rhonda Thomas-Whitley and Brian Laverdure

Staff Contacts

Rhonda Thomas-Whitley

Vice President, Regulatory Counsel



Brian Laverdure

Vice President, Payments and Technology Policy

Sauk Centre, MN