Jeff Harper, President, BSG Financial Group

Recent Posts

Overdraft Privilege Myths Debunked

Posted by Jeff Harper, President, BSG Financial Group on Aug 16, 2016 11:59:28 AM

Most financial institutions acknowledge that overdraft fees represent a remarkable source of non-interest income. What may not be clear to some is the fact that overdraft privilege programs are more than just a source of revenue. Recent data suggests that the service offers as much of a benefit to the consumers who use it as it does to the institutions that provide it. 

Consumer Financial Protection Bureau (CFPB) director Richard Cordray has said on many occasions that his agency is not looking to do away with overdraft services (but is instead leaning toward minor changes in how institutions manage the programs). As such, it doesn't appear overdraft programs are going away. 

So how should community institutions view overdraft privilege in the current environment?

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Topics: Courtesy Overdraft, Compliance, Overdraft Protection, CFPB, overdraft privilege

Dynamic vs. fixed overdraft limits: And the winner is…?

Posted by Jeff Harper, President, BSG Financial Group on Jun 21, 2016 10:25:07 AM

In this corner… the Contender, Fixed Limits, challenging the formidable upstart, Dynamic Overdraft Limits….

Indeed it may seem like you’re in a boxing match when deciding which type of overdraft limits you will offer in your automated discretionary overdraft program.

Both types of limit-setting strategies enable your institution to automatically allow or disallow overdrafts for those account holders who utilize your service.

The Contender:
FIXED LIMITS provide a “one-size-fits-all” approach that is determined at account opening. All account holders who qualify to be in the program, receive the same overdraft limit; OR the limit varies based on account type (i.e., $550 for Free Checking and $750 for Premier Checking).

The Challenger:
DYNAMIC LIMITS are calculated automatically based on a myriad of account holder data points, including specific deposit and overdraft activity, related balances and more. This data enables your institution to establish a risk profile for each account and assign individualized overdraft limits based on the account holder’s ability to repay the overdraft and fees at any given time.

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Topics: Overdraft Compliance, Overdraft Management, Dynamic Overdraft Limits

Community Banks Can 'Up Their Game' With the Right Digital Lending Partner

Posted by Jeff Harper, President, BSG Financial Group on May 18, 2016 8:00:55 PM

American Banker published another article last week about the opportunities that exist for community banks to enter the digital lending space, which is now almost exclusively dominated by marketplace lenders, such as LendingClub and others.

Marketplace lenders are the online outlets that pair borrowers and lenders through the use of a digital platform without a traditional bank intermediary—often underwriting and delivering loans outside traditional bank debt capacity and coverage ratio underwriting and pricing. They are generally considered rivals to community banks, siphoning off customers who choose convenience over often high interest rates (some as high as 29%).

The article, entitled, "Marketplace Lending Was Just What Banks Needed" points out that, despite some recent bad publicity, marketplace lenders have succeeded in filling the needs of consumers who crave the convenience of being able to apply for a loan digitally and get funds quickly. Their focus on automating the small business lending process has helped them double their outstanding portfolio balances every year since 2000.

Their success has forced community banks to 'up their game' and become part of the digital revolution.

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Published article: Use the right overdraft provider to do the right thing

Posted by Jeff Harper, President, BSG Financial Group on Apr 12, 2016 7:00:00 AM

Published on, April 8, 2016

I think we can agree that there are consumers who need short-term liquidity options. Among several recent studies, the Brookings Institution reveals that one-third of American households live paycheck to paycheck; and American Banker data cites that 54% of checking account customers are in poor financial health.

Financial institutions can provide a valued service by offering a compliant overdraft privilege program to help these individuals manage unexpected, ill-timed expenses. In fact, a recent study by Novantas said that 66% of overdrafts occur when consumers knew they have a low balance, but want the payment to go through anyway.

So how does your financial institution offer a cost-effective service without encouraging reckless behavior? A good place to start is to review how your third-party overdraft vendor is compensated, which can affect the way the program is viewed by regulators and how it is executed vis-a-vis account holders.

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Topics: Overdraft, Compliance, published articles

BSG Financial Group Announces the Addition of Business Development Executive Trevor Knott

Posted by Jeff Harper, President, BSG Financial Group on Mar 7, 2016 6:54:26 PM

We are pleased to announce the addition of Trevor Knott as Senior Vice President, Business Development, effective March 1, 2016.

Trevor will help us expand our footprint in the following states: Connecticut, Delaware, New Hampshire, New Jersey, New York, Rhode Island, Maine, Massachusetts and Vermont.

Trevor is a strategic marketing veteran who has spent much of his career developing and delivering products and services, as well as marketing and distribution programs for top-tier banks and suppliers to the banking industry. His focus at BSG Financial Group will be on generating new business in the northeast; forming strategic partnerships across the country; and advising corporate marketing activities.

Continue reading about Trevor.


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Is Overdraft Privilege Dead?

Posted by Jeff Harper, President, BSG Financial Group on Feb 23, 2016 5:49:35 AM

You might answer, 'Yes’ if you saw the headline, "CFPB Urges Banks to Ditch Overdraft Accounts," from an American Banker article published Feb 3, 2016.

However, if you read the entire article, you found that The Consumer Financial Protection Bureau (CFPB) director Richard Cordray was merely asking financial institutions—in a letter he sent to the nation's 25 largest retail banks—to consider providing products for consumers who cannot obtain checking services, and to "lower the bar" when it comes to screening them for those products.

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Topics: Courtesy Overdraft, Compliance, Overdraft Protection, CFPB, overdraft privilege

Article Roundup: (Positive) Overdraft Protection News

Posted by Jeff Harper, President, BSG Financial Group on Jan 13, 2016 11:21:57 AM

We're not sure if it's a trend or merely a coincidence, but there have been quite a few articles in the trades recently that paint overdraft protection in a more positive light than usual. We think it is beneficial to share these articles that substantiate our belief that overdraft protection programs are, in fact, helpful to many consumers in meeting short-term liquidity needs. Further, the majority of consumers who access overdraft privileges do so as the result of an informed and conscious decision. 

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Topics: Overdraft, News, Courtesy Overdraft, Overdraft Protection

The Right Overdraft Program Provider Does ‘The Right Thing’: No Incentive Compensation

Posted by Jeff Harper, President, BSG Financial Group on Sep 29, 2015 2:36:00 PM

BSG Financial Group recently participated in an informative webinar sponsored by the American Bankers Association, called “Avoiding ‘OOPS!’ in Your Overdraft Protection Program.” As the title implies, the focus was on compliance and mitigating risk as it relates to managing a discretionary overdraft program. The program provided tips on how to successfully offer consumers a cost-effective service without encouraging reckless behavior by actively managing the legal, compliance, operations and reputation risk that accompanies overdraft protection (ODP) programs today.
The webinar offered many sound suggestions with regard to ad hoc decision-making, lines of credit, etc., but we found the section that related to third-party arrangements especially valuable.  According to the presenter, Patti J. Blenden, CRCM, CPA, President, Financial Solutions for Growing Companies, Inc., overdraft programs managed by third-party providers have the potential to raise concerns that differ from in-house ODP solutions.

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Topics: Overdraft, Pay-for-Performance, Courtesy Overdraft, Compliance

Budgeting for Profitability in 2016

Posted by Jeff Harper, President, BSG Financial Group on Sep 15, 2015 2:25:00 PM

It’s that time of year again, when financial institution management teams around the nation are in some stage of planning and budgeting for 2016.

When seeking areas for investment, non-interest income is still front and center, along with compliance and customer communications. All of these areas of potential growth can be addressed with innovative technology solutions, which will be crucial to create sustainable profitability and enhanced customer service for next year and beyond.

According to a recent study by Cornerstone Advisors, roughly half of community banks and credit unions will spend slightly more on IT in 2015 than they did in 2014. This growing trend in technology investment is likely to increase even more next year.

To that end, many a CEO/CFO would like to find that “ace in the hole” line item project that will deliver an immediate increase in revenue without taxing compliance or IT resources. Listed below are two such solutions that your management team should consider. (You can download a complete list here: 'Four Surefire Ways to Improve Your Financial Institution's Performance.')

Each solution has proven successful in helping other financial institutions just like yours generate non-interest income; streamline processes; or maintain compliance without compromising their financial institution's resources.

Solution #1: Profitable, Personalized Checking Accounts

Get out of the “free checking” bind that can cost your institution $250 to $400 per account annually to sustain. Instead, offer a fee-based checking account that is enhanced with value-add products and services that are important to the customer, who will pay a small fee for extras they find useful.

Bundled, fee-based accounts can include benefits like:

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Topics: Fee-Based Checking, Courtesy Overdraft, Non-Interest Income, Budgeting

Overdraft Management: Our 'Responsible Approach™' Defined

Posted by Jeff Harper, President, BSG Financial Group on Aug 31, 2015 2:12:00 PM

We often refer to our 'Responsible Approach™' in the management of account holder overdrafts. Let us explain...

BSG Financial Group built our overdraft software CourtesyConnect®/CourtesyLimit™ (CC/CL) with an emphasis on financial institution and account holder protective practices. This "Responsible Approach™" to overdraft management allows your financial institution to offer overdraft protection in a compliant and customer-friendly way.

CourtesyConnect®/CourtesyLimit™ is a program that was truly built by a banker for bankers. The software incorporates a CRM platform to help your institution provide higher levels of communication to account holders while assisting them in managing their short-term liquidity needs. It's not often a solution comes along that can have such an enormous effect on increasing account holder satisfaction, while also generating income for your institution. 

The caveat: This program must be managed responsibly.

Dynamic Overdraft Limits. With CourtesyConnect®/CourtesyLimit™ financial institutions can offer an overdraft service in a consistent and fair manner, in complete alignment with all federal regulatory guidelines. For instance, in addition to counseling financial institutions on successfully obtaining Reg E opt-ins, the program offers dynamic overdraft limits for each account holder based on account algorithms, analyzing the person’s ability to repay the overdraft. This feature directly addresses the FFIEC 2005 directive that states, “Institutions also should monitor these accounts on an ongoing basis and be able to identify consumers who may represent an undue credit risk to the institution….” It is a safeguard that continually and automatically assesses risk.

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Topics: Overdraft, CourtesyConnect, Responsible Approach

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