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Success Story: Village Bank Overhauls Ad Hoc Overdraft Program for Enhanced, Compliance, Service

Posted by Michele Rehm, Marketing Manager on Aug 8, 2018 2:04:22 PM

village bank logoSince Village Bank opened its first branch in 2000, branch managers had been entrusted with making pay/return decisions for NSF items, including whether to charge overdraft fees. The process resulted in preferential treatment for some customers, putting the bank’s reputation and compliance at risk.

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Topics: Overdraft Protection, Dynamic Overdraft Limits

Is a Fixed Overdraft Limit-Setting Strategy Too Aggressive?

Posted by Andy Smith on Jul 31, 2018 9:02:47 AM

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Has this ever happened to you? An account holder, let's call him Dave Smith, has opened a checking/share draft account at your financial institution. After 30 days of consistent deposit activity, minimum balance requirement and no overdrafts, he qualifies for your institution's discretionary overdraft program.

You give Mr. Smith an overdraft limit of $500—the same limit you assign to every other customer who opens this type of account and qualifies for the service. Mr. Smith can now access your institution's overdraft service (at your discretion) up to the fixed limit of $500. 

Fast forward several months only to see Mr. Smith's name on a monthly charge-off report; and you wonder...where did Mr. Smith go wrong?

Or was it us?

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Topics: Fixed Overdraft Limits, Overdraft Compliance, Dynamic Overdraft Limits

Dynamic Overdraft Limits a Hot Topic with Industry Executives

Posted by Jeff Harper, President, BSG Financial Group on Jun 21, 2018 10:39:26 AM

Formal discretionary overdraft programs—despite their past stigma—are a topic for consideration again for financial institutions. I draw this conclusion based on the hundreds of conversations I have had over the past several months with financial executives while attending and exhibiting at various industry trade shows and conferences.

It seems many institutions that had previously adopted a 'wait and see' stance about implementing a discretionary overdraft program are now moving forward. Some executives said the encouraging news coming from the CFPB is their impetus to modernize. Other institutions simply realize their programs are outdated, inefficient and need to be updated in order to provide exemplary service and generate new income.

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Topics: Compliance, Fixed Overdraft Limits, Overdraft Management, Dynamic Overdraft Limits

Your Bank Just Got the 'Green Light' to Offer Short-Term, Small Dollar Loans

Posted by Jeff Harper, President, BSG Financial Group on May 31, 2018 5:24:54 PM

The Office of the Comptroller of the Currency is encouraging banks to offer short-term, small dollar loans to subprime borrowers, according to the recent American Banker article, OCC Gives Banks Green Light to Compete with Payday Lenders.

The article states that OCC Comptroller Joseph Otting wants banks to originate loans of $300 to $5,000 to borrowers with FICO scores of 680 or below, with few other parameters beyond "sound underwriting." In doing so, the new OCC guidelines could open a $90 billion market to financial institutions.

"This product is a vehicle to help people get back into mainstream banking and get them off of high-cost financial services products of check-cashing and payday lending, with a view toward getting them into the mainstream of financial activities where they can qualify for a credit card," Otting said on a conference call with reporters.

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Topics: MinuteLender, PaySound, Consumer Loans

The News Your FI Has Been Waiting for: Mulvaney signals no new regulations for discretionary overdrafts

Posted by W. Barrett Nichols, founder & CEO on May 18, 2018 8:48:12 AM


There has been a plethora of news stories lately about the intentions of the Consumer Financial Protection Agency (CFPB) to roll back banking regulations, but this one from American Banker is a must-read: 
"From overdraft to HMDA, rulemaking has new look at Mulvaney’s CFPB. The article explains that acting CFPB director Mick Mulvaney has "overhauled the agency’s spring agenda, dropping several long-time goals of his predecessor, including a rule on overdraft programs." 

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Topics: Courtesy Overdraft, CFPB

Community Banks Rapidly Losing Small Business & Consumer Loan Market Share

Posted by Michele Rehm, Marketing Manager on Apr 17, 2018 10:57:25 AM

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The growth of digital lending—and community banks' failure to keep up with the pace—is illustrated clearly (and pretty harshly) in the charts below. 

According to FDIC and Fintech industry data, community FIs have lost nearly half their market share of small business loans under $100k to large banks and Fintech companies in the last seven years. This is unfortunate considering that small business loans have been a distinguishing strength of community banks in the past and serve as a key pipeline for future loans.

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Topics: Digital Lending, non-bank lenders, Small Business Loans, Fintech, Consumer Loans

10 Ways to Make CDs Cool Again

Posted by Michele Rehm, Marketing Manager on Apr 10, 2018 7:14:22 AM

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Topics: CDs, Deposit Accounts, CoreCD, Time Deposits

Monitoring Loan Officer Facebook Posts is Necessary (& Easy)

Posted by Jeff Harper, President, BSG Financial Group on Mar 23, 2018 9:10:30 AM

One of the questions we receive most often regarding social media management is:

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Topics: Social Media Compliance, Social IQ, Social Media

Rio Bank and Shore Bancshares, Inc. Select BSG Financial Group for Income, Compliance

Posted by Michele Rehm, Marketing Manager on Feb 22, 2018 11:08:07 AM

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Topics: Company News, CourtesyConnect, Social IQ

Capitalize on Easing Banking Regulations: Provide Better Service with a Compliant Discretionary Overdraft Program

Posted by Jeff Harper, President, BSG Financial Group on Feb 6, 2018 9:08:36 AM

A year ago, President Trump signed an executive order that directed agencies to identify two regulations to cut for every new one they intended to issue. We're 37 days into 2018 and it appears the president is keeping his word: “In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history of our country,” Trump said during his State of the Union speech last week.

Even the most cynical nay-sayer should feel positive about this changing regulatory climate.

We are especially encouraged with regard to the future of automated overdraft programs for several reasons:

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Topics: Compliance, CFPB, Overdraft Management