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:
- A diminishing role for the Consumer Financial Protection Bureau (CFPB) after Trump appointed new leadership to the agency and the Supreme Court upheld the decision
- A former banker, Joseph Otting, was sworn in as U.S. comptroller of the currency to serve as the leading regulator of national banks
- Approved changes to Dodd-Frank reforms
- Five federal financial regulatory agencies revealed likely changes to overdraft programs that seem rather minor, including revised disclosures, standard posting order and balance calculation methods
Indeed these positive signals should encourage financial executives that the outlook for automated overdraft programs is bright. In fact, with such good news—which is arguably the most favorable in years—now is the time to do what community financial institutions do best—serve account holders with innovative, yet compliant, financial products and services.
An automated discretionary overdraft program not only enhances fee income for your institution, it provides a solution to your account holders' short-term liquidity problems, including:
- PROBLEM: ATM and Debit Card Transaction Denied Due to NSF
SOLUTION: Track account holders who have not responded with a decision regarding the important amendment to Regulation E. Many consumers are not even aware that they could be denied debit card and ATM transactions due to NSF unless they authorize your financial institution to allow them. How many important purchases do you deny because your account holders don’t know they have a choice?
- PROBLEM: Denied Debit Card Transactions Despite Opting In to Reg E
SOLUTION: Adjust daily overdraft limits to match to your account holder’s ability to repay the overdraft and fees. Are your account holders experiencing denied transactions that they can actually afford? Or worse, are they overdrafting when they should not be allowed to? Federal guidance clearly requires financial institutions monitor the credit risk of each account holder and make plan adjustments “to ensure that credit risk remains in line with expectations.”
For more information about providing exemplary service through a discretionary overdraft program, download the brochure: The CourtesyConnect/CourtesyLimit Edge, which outlines BSG Financial Group's distinct program benefits and dedication to compliance.