Resolving negative accounts: Is it 45 or 60 days?

A frequently-asked question that the Regulatory Compliance Team sees is how long a credit union has to deal with a deposit account with a negative balance. The answer depends on what you mean by “deal.”

FCU Overdraft Policies: The 45-Day Rule

If a federal credit union advances money to members to cover account deficits without having the borrower complete a loan application, the FCU must comply with paragraph 701.21(c)(3) of NCUA’s rules and regulations. Specifically, the FCU must establish a policy that:

  • Sets a cap on the total dollar amount of all overdrafts that the FCU will honor (consistent with its ability to absorb losses);
  • Establishes a time limit not to exceed 45 calendar days for the member to deposit funds or obtain a loan to cure the deficit;


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