Don’t like the idea that if you are close to the bottom of your checking account and you go over the line with a $7 sandwich you could be subject to a $35 overdraft fee? You don’t have to deal with that anymore since the Electronic Funds Transfer Act, or Regulation E, became effective Nov. 12.

Reg. E prohibits banks from charging overdraft fees unless the customer opts in to overdraft protection.

Banks and other institutions will pull in $38.5 billion this year from overdraft fees according to data compiled by the research firm Moebs Services Inc.

So what is the impact on the community institutions?

“It is going to be significant for the industry,” said Brad Hunter, senior vice president of Exchange Bank. “It will be a financial hit.”

Banks will not be allowed to charge fees at point-of-sale and ATM transactions without customer approval.

“The industry was kind of depending on those overdraft fees, and a higher percentage was being attributed to those kinds of charges,” Mr. Hunter said.

“It will be interesting to see how banks respond to it, if there will be changes in other product line pricing. Some of the bigger banks are saying this is the end of free checking,” he said.

On the implementation side, he said the systems will have to be programmed to know whether the customer is an opt-in or an opt-out.

Tom Ragusa, vice president of Charter Oak Bank in Napa, said, “The recent rule passed under the Electronic Funds Transfer Act will have an effect on all banks in regards to overdraft and overdraft fees. Bank systems will need to be updated for opt-in/opt-out classification so accounts are handled properly. Customers will need to 'opt in' for us to pay an ATM transaction or debit card transaction that overdraws an account. While the bank has previously accepted these transactions and typically paid them for the customer, if the customer does not 'opt in,' these items will be declined at the time of the transaction, and the customer will not be charged an overdraft fee.”

Banks are constantly asked to deal with new laws, and this is no different, one banker said.

“Banking is a heavily regulated industry,” said Mark Chapman, senior vice president and chief marketing officer of Tamalpais Bank “Our bank and other banks are used to making changes.”


Gary McClernan, an MPA, CPA and CMA, recently started a chief financial officer and controller consulting business in the North Bay.

Designed to help companies with these services that would not ordinarily have those positions filled, he is taking his expertise from working with mezzanine-level firms and companies – companies in the $50 million sales dollar range with their initial public offerings – and bringing it to small businesses.

“I am helping companies get to the next level,” he said.

His business model is working with the company two days a month.

As the controller he works with the company with internal controls, helps reduce the risk of not complying with accounting practices and protect them from fraud.

As the CFO, he would go to the company and help it look to the future.

“Being a controller is now,” he said. “You are dealing with the every day issues and taking care of business. Being a CFO is forward looking.”

There are a handful of other businesses that offer similar services.

Mr. McClernan has two rate structures. One is for hourly project and interim work. The second is for contract work where he helps the company assess its accounting system; create a strategic plan, a budget and integration with its accounting system; and conduct monthly on-site visits, and he is available on call.

For more information, visit, www.northbaycfo.com.


American River Bankshares, parent company of North Coast Bank, announced the commencement of a common stock offering.

Roughly $22 million of common stock will be offered in an underwritten public offering with Howe Barnes Hoefer & Arnett Inc. acting as manager and Wunderlich Securities Inc. acting as co-manager.


SVB Financial Group announced a public offering of 7.8 million shares of common stock at $38.50 per share. The underwriters will also have a 30-day over-allotment option to purchase up to 1.17 million additional shares from the company at the same price.


Submit items for this column to Jenna V. Loceff at jlocecff@busjrnl.com, 707-521-4259 or fax 707-521-5292.