Four Letters. Infinite Potential.

Does your overdraft program pass the UDAAP test?


If your bank or credit union is running a “Do-It-Yourself” overdraft program,

here are 5 questions you should ask in order to determine if you’re at risk for a Unfair or Deceptive or Abusive Acts or Practices (UDAAP) violation.

UDAAP are misleading or harmful behaviors by those who offer financial products or services to consumers, and are illegal as defined by the Dodd-Frank Act of 2010. These can be advertising materials or actions intended to deceive consumers or harm them financially.

1. Do you provide a full program description, including charges, features and restrictions? 

2. Are advertisements related to your program misleading? Do they leave important information out (fees charged, or lead the consumer to think the service is free)?

3. Do your disclosures include information on the cost and consequences of overdrafts?

4. Do your account holders receive any warning or notice that an overdraft might occur?

5. Do your account holders have the opportunity to “opt-in” to have overdraft protection for everyday ACH and point of sale transactions?

Compliance continues to be a top concern for many.  Overall these are a few very important questions you should consider when evaluating your overdraft program.


Watch these videos to learn more about the benefits of a fully-disclosed overdraft program and our compliance approach.