Asked by TEDDY VELISSARIS on May 17, 2024
Verified
Which of the following is true regarding what a bank may do to offer overdraft protection to customers?
A) In regard to overdraft protection a bank may (1) credit a customer's checking account although federal law prohibits charging for this service, (2) link a checking account to the customer's savings account to cover the overdraft, and (3) link a checking account to the customer's credit card to cover the overdraft.
B) In regard to overdraft protection a bank may (1) credit a customer's checking account and charge for this service, (2) link a checking account to the customer's savings account to cover the overdraft, and (3) link a checking account to the customer's credit card to cover the overdraft.
C) In regard to overdraft protection a bank has only two options (1) link a checking account to the customer's savings account to cover the overdraft, and (2) link a checking account to the customer's credit card to cover the overdraft.
D) Under federal law, the only option open to a bank in the event of a customer's overdraft is to credit the customer's account although no charge may be made for the service.
E) Under federal law, the only option open to a bank in the event of a customer's overdraft is to credit the customer's account, and a charge may be made for the service.
Overdraft Protection
A financial service that prevents checks, withdrawals, and other transactions from resulting in a negative account balance, often by linking to another account or providing a line of credit.
Federal Law
Laws passed by the national legislature of a country, applicable throughout the country.
Dishonored Check
A check that a bank refuses to pay, usually because the account holder does not have enough funds.
- Describe overdraft protection options available to bank customers and legal restrictions.
Verified Answer
Learning Objectives
- Describe overdraft protection options available to bank customers and legal restrictions.
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