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can my bank reduce my overdraft

+3 votes
Need to know if I can reduce an overdraft
asked Jan 20, 2014 in Checking Account by simon
recategorized Jan 20, 2014 by DeniseC
   

1 Answer

+1 vote
Yes, but they must give you notice. From a legal standpoint, the bank has an agreement with you to allow you to overdraw your account up to a set limit. Therefore, you have a reasonable expectation, based on past experience, that overdrafts will be covered up to the set limit. If the bank fails to notify you of any reduction, you may have a case for lender liability for any hardship a bounced check may have caused (and possibly punitive damages).
Typically, a bank should give you at least one weeks notice before terminating your overdraft privilege. This gives you time to make other arrangements before the bank starts bouncing checks.
answered Jan 21, 2014 by charlie Inquisitive Expert (100,740 points)

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