Word: overdraft
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...Overdrafts Even friendly Senators on the committee pointed out that Lance's biggest problem was to explain why he, his wife LaBelle and relatives, as well as his 1974 campaign committee, had been allowed to write large checks that seriously overdrew their accounts. As Democrat Henry Jackson told Lance: "The man on the street comes up to me and says, I cannot have an overdraft, and he sees one after another ... I think this is the heart of your problem...
Lance responded that the Calhoun bank had long had a "liberal" overdraft policy to attract customers and that it applied to all depositors. Moreover, he contended, such a policy was "not an unusual practice" in a small rural community like Calhoun, where the bankers knew most of their customers and could judge whether this "extension of credit" involved any risk...
Some Senators were quick to point out, however, that Lance's other accounts were often insufficient to cover the overdrafts by himself, his wife-whose personal overdrafts reached a high of $110,493 in 1974-and his gubernatorial campaign committee, which overdrew its accounts by as much as $152,706 in 1974. He insisted, however, that he had given the bank a $110,000 certificate of deposit to cover any campaign overdrafts, as well as an unlimited signed guarantee that he would meet all of his political committee's debts to the bank. And, Lance claimed...
...committees are scheduled to begin next month. A probe by the Senate Banking, Housing and Urban Affairs Committee, headed by Senator William Proxmire (the only Senator to oppose Lance's confirmation last January), will use the Lance case as a wedge to look into loans to bank insiders, overdraft policies and general banking practices...
...bank with, say, a minimum deposit of $100 and gets a book of payment orders. When he wants to pay a bill, he simply writes out an order as he would a check. Only narrow technicalities distinguish these accounts from checking accounts. One of them: savings banks cannot offer overdraft privileges on payment accounts...