Managing Overdraft Accounts

Account holders must meet requirements to enroll in overdraft protection and to maintain access to the overdraft line of credit. This section is an overview of requirements for overdraft account eligibility, as well as account holder loss of access to the line of credit.

Account holder eligibility

An account holder must meet these requirements set by Galileo to be eligible for an overdraft account:

  • The account holder must have an active primary account (usually a DDADDA - Demand deposit account. The banking-industry term for an account from which funds can be withdrawn at any time, such as a checking account.) with a balance greater than or equal to zero.
  • The account holder must opt in to overdraft protection.

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Note

You or your bank can implement additional requirements for account holder eligibility.

After an overdraft account is created, the account holder must meet these requirements for ongoing eligibility:
The account holder must keep a correctly formatted email address on record.
The overdraft account must be paid in full within 35 days after funds are first drawn on the overdraft account (configurable).
The account holder must make at least one deposit to the primary account at or above a threshold amount within 35 days (configurable).

Account holder loss of access to the line of credit

A process checks if account holders are eligible for overdraft line of credit. An account holder may lose access to the overdraft line of credit if:

  • The account holder does not meet requirements for ongoing eligibility.
  • The overdraft fee cap is met.
  • The account holder opts out.

If the account holder is no longer eligible for the overdraft line of credit, Galileo suspends the overdraft account. According to your arrangements, with Galileo, Galileo sends you the following events when an overdraft account is suspended:

While the overdraft account is suspended, deposits made to the primary account are used to pay any overdraft funds owed. Any new overdraft authorization requests are denied.

If the account holder becomes eligible for the overdraft line of credit again, the same process restores the overdraft account to active. Galileo sends you the ODSC: overdraft_status_change event.

Disabling an overdraft account

You can manually disable an overdraft account via Galileo’s Program API, either by freezing the account or sending an overdraft opt-out request. Follow the procedures under Disabling the overdraft account in the Creating an Overdraft Account guide.

Account charge-off

If funds owed against an overdraft account remain unpaid for a configurable period of time (usually 35 days), the account is considered to be in default and Galileo starts the charge-off process. Funds are swept from the overdraft account to the primary account, then from the primary account to your charge-off account. For more information, see the workflow, Funds transfer in case of non-repayment.

Charge-off recovery

Charge-off recovery is an optional feature that allows Galileo to reactivate an account holder’s DDA that has been charged off. When configured, any funds loaded into the DDA account after closure trigger the transfer of the amount that was charged off from the DDA to the overdraft account.

If the DDA balance is less than the charge-off amount, all available funds are transferred to the overdraft account. The DDA will have a balance of 0, and the overdraft and DDA will remain in a charge-off status until the overdraft amount is repaid in full.

If the DDA balance is greater than the charge-off amount, only the charge-off amount is transferred to the overdraft account. The DDA is reopened and the account holder can use it for transactions, but the overdraft account remains closed. To reactivate overdraft protection, you or the account holder must contact Galileo Customer Service.

When charge-off recovery is not configured, if funds are transferred into the DDA account, Galileo takes no action and the account holder must contact Customer Service to pay the charge-off amount owed and to reactivate overdraft protection.

Account holder inquiries

You configure your own system to handle account holder inquiries about overdraft account eligibility and usage. Galileo offers the following services that you can incorporate.

  • Monitoring and notifications — Galileo reports events, such as change in account holder status, funds used, funds owed, and program rule compliance. You can access this data using Galileo’s Events API (see Events API webhooks for overdraft) and the Customer Service Tool (see Viewing overdraft accounts in the CST).
  • Custom Data Files (CDFs) — You can retrieve overdraft-related data at the program and product level from Galileo’s CDFs, delivered via SFTP, or in real time from gAnalytics reports.

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