Industry Leader Touts Future of Courtesy Overdraft Programs

Posted by W. Barrett Nichols, founder & CEO on Sep 13, 2017 11:27:32 AM

While reading the latest installment of the Temenos Group blog, the old advertising line, "When E.F. Hutton talks, people listen," came to mind. Temenos is one of the largest producers of software for banking and finance, with over 2,000 clients across the globe, including 41 of the top 50 banks. The company, which spends 20% of its sales annually on R&D, is well-respected for its deep industry knowledge that helps customers stay ahead of a changing marketplace. When Temenos comments on an industry trend, people tend to listen. Or they should.

What the company had to say about courtesy overdraft programs may cause your financial institution to re-evaluate the solution you currently offer... or make you scramble to get one in place.

New Call-to-actionIn a nutshell, Temenos Chief Compliance Advisor, Blair Rugh, stated emphatically in the blog post:

"If you do not offer a courtesy overdraft program, I suggest you reconsider your decision.

Maybe your initial decision was correct for your institution at the time it was made, but possibly now that the dust has settled and the issues are better defined a different decision would be more appropriate."

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Topics: Responsible Approach, CFPB, Overdraft Compliance, Dynamic Overdraft Limits

Re-Emerging Overdraft Programs Must Focus on Service, Responsibility

Posted by Jeff Harper, President, BSG Financial Group on Aug 28, 2017 7:50:56 PM

The conversation about overdrafts has been somewhat non-existent the past several months as community banks and credit unions patiently wait for impending compliance directives, changes within the CFPB and an uptick in the economy. It seems now–with positive movement regarding all these concerns–it’s time to start talking about the opportunities overdrafts represent and the best way to seize them.

CUES recently reported that “with The Financial Choice Act likely to pass Congress, compliance on overdrafts appears headed for less restriction.” This assertion is based on the fact that part of the proposed Financial Choice Act dismantles key parts of Dodd-Frank, which created the Consumer Financial Protection Bureau (CFPB), whose role will be redefined under a new name. The act–among other improvements–“removes the board’s opaque and ill-defined unfair, deceptive, or abusive acts and Practices (UDAAP) authority,” while still emphasizing consumer protection. The bill passed in the House on June 8 and goes to the Senate next for consideration.

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Topics: Responsible Approach, CFPB, Overdraft Compliance, Dynamic Overdraft Limits

Equality in Overdraft Management

Posted by W. Barrett Nichols, founder & CEO on Jan 19, 2016 9:00:00 AM

We can think of no better day than Martin Luther King, Jr. Day to reflect on equality. And while many people this week ponder equality in terms of race, religion or even sexual orientation, we think it also applies to the banking world—specifically to equality in overdraft management.

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Topics: Overdraft, Compliance, Responsible Approach, Dynamic Overdraft Limits

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