Overdraft Privilege Continues to be an Important product for Consumers

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With the ongoing negative perception and strict regulations surrounding overdraft privilege, financial institutions find it increasingly challenging to offer this service. Most adults in the U.S. consider overdraft privilege a valuable resource at a reasonable price, highlighting the significant disconnect between regulators and public sentiment.

Overdraft privileges help consumers avoid declined transactions, which can lead to late payment fees and non-sufficient funds (NSF) charges. Consumers feel it is essential to have overdraft privileges to ensure that large payments, such as mortgages or rent, are covered and paid on time if these payments overdraft their accounts. Generally, overdraft privilege is more affordable than some short-term credit alternatives, like payday loans. This is why most consumers have not seriously considered giving up their overdraft privilege. While some consumers with a buffer amount in their checking accounts may not need overdraft privilege, for most Americans, it is necessary to prevent essential transactions from being declined.

When surveyed, banks have found that consumers appreciate that banks covered payments that would have otherwise been declined. Consumers have an easier time checking their account balances than ever before. With access to their accounts via websites or mobile apps, many Americans can monitor their account balances to avoid overdrawing their accounts and incurring fees.

For decades, Strunk has supported financial institutions in delivering a convenient overdraft privilege to their clients while enhancing fee income and ensuring full compliance. Our consulting services for overdraft privilege, combined with top-notch software, can help your institution’s program thrive. Given the increasing regulatory scrutiny, our compliance guarantee is becoming even more crucial. As regulators focus on returned checks and re-presentment, our Overdraft Privilege (ODP) program provides excellent service to customers by covering item costs instead of returning them.

Click here for more information or to contact Strunk for a demonstration.

ODP Manager Comments and Reminders

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Hosted ODP Manager allows users the option to create comments or reminders as needed. If institutions do not already have a robust method of tracking notes, they can choose to use this useful feature. The comments and reminders are created for the individual account. They are retained in the individual account view and are printed with the Account Summary PDF as well.

After speaking to the customer or reviewing the account, users can add notes that can be viewed by all ODP Manager users. Comments can be used to document information. Reminders can be used to identify items that need follow up as of a certain due date. Attachments can be added in comments or reminders as needed.

Comments or reminders are created by clicking the Calendar or Speech icons when viewing the accounts listed in Account Inquiry. The Calendar and Speech icons can also be used in the letter generation screens, or on the Overdraft Aging, New Accounts, Status Tracking, Fresh Start Tracking, or Heavy OD Users Reports. When viewing an individual account’s reminders or comments, the Add Reminder or Add Comment buttons can be clicked.

Overdue reminders are displayed in the Events section which users can access by clicking Events in the purple bar in ODP Manager. Upcoming reminders can also be displayed. Once reminders are completed, they can be marked as closed.

If you have any questions about using comments or reminders in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Using ODP Manager to Review Your Overdraft Privilege Program Information

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Strunk’s hosted ODP Manager software is updated daily with information contained in an extract file generated from your core system. After the daily import, users can generate letters, review management reports, and access additional information to effectively manage a compliant ODP program.

Percent of accounts with an assigned overdraft limit and percent of accounts opted in for Regulation E are important metrics to monitor for the success of an ODP Program. This importance is highlighted on the Dashboard which is displayed after each ODP Manager login. Trends in the Percent with Limit and Percent Opt In are shown over several months. Monthly benchmarks for the Percent with Limit and Percent Opt In are compared to other Strunk clients by the 25th, 50th, and 75TH percentiles. Overdraft Fee and Overdraft Limits are also benchmarked against other Strunk client percentiles. The Utilization Analysis report and the Opt-In Impact report allow users to further review the percentages summarized by branch and by deposit product.

On reports that include account-level details, users can apply filters or select groups to further examine data. Once the filters are applied, the filtered results can be exported to PDF or Excel for additional review or discussion. Reports that show account details include Overdraft Aging, New Accounts, ODP Status Tracking, Fresh Start Tracking, and ODP Heavy Users.

In the Account Inquiry area in ODP Manager, users can apply column filters and groups. If users need to create a list of accounts meeting certain criteria, Account Inquiry gives them the flexibility to build the list and export it to Excel. This flexibility allows users to access all the data included and mapped from the daily import file.

ODP Manager also allows users the ability to search for specific events that occur during a date range. This can help users compile a list of letters sent, OD limits assigned or removed, or Reg E opt ins or opt outs.

If you have any questions about ways to view or export the data in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

How to track responsibility for each vendor

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Financial institutions are increasingly outsourcing various business functions. Given the growing regulatory and compliance landscape, maintaining an efficient vendor management program is essential for any financial institution engaged in outsourcing risk. Having numerous vendors in your operations can complicate your vendor management program, especially if your financial institution is unclear about who is responsible for each vendor. In a vendor management program, the individual accountable for each vendor is often referred to as a ‘Vendor Owner.’ This person works within your financial institution to manage the daily relationship with the vendor, encompassing communication, contract oversight, performance monitoring, risk assessment, and resolution of issues. Essentially, they take ownership of the vendor relationship to ensure it meets the company’s needs.

The vendor owner is often a representative from the business unit that predominantly uses the vendor’s services. This person has extensive knowledge of the necessary product or service and is well-equipped to manage performance effectively. While this isn’t universally true, most financial institutions typically identify their vendor owners this way. In Strunk’s Vendor Manager software, your financial team can designate a vendor owner for each vendor, as well as assign responsibility for other activities such as contract management, risk assessment, and performance monitoring. An effective vendor management program must assign responsibilities and track them efficiently, which Strunk’s Vendor Manager software facilitates. It also provides reporting features to ensure tasks are completed on time and not overdue. Your financial institution can also categorize vendors in Strunk’s Vendor Manager software by defining vendor types, ensuring that each business unit understands which vendors they are responsible for. You can establish your own naming system in this customizable field. Identifying the business unit of your vendors and determining the vendor owner for each will enhance the organization and efficiency of your vendor management program.

 

Save Reports Automatically After Each Import

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The hosted ODP Manager software includes a comprehensive suite of standard reports. These reports should be reviewed periodically to assist with Overdraft Privilege program management and maintenance. These reports are updated after the daily extract file is imported into ODP Manager. Reports can be viewed in the browser or can be exported to a PDF or Excel file.

In addition to allowing users to review reports for the last seven as of dates in the browser, ODP Manager also offers a Report Archive feature. This allows past reports to be automatically retained so that they are available for future review, analysis, or comparison as needed.

Institutions can select which reports they would like to archive. After each import succeeds, the selected reports are saved as a PDF and stored within the ODP Manager software. The reports can be retrieved from the Archived Reports section in Reports and are organized by as of date. If users would prefer to download the reports to store on a network drive, the Archive feature can be configured to allow a Download Report Archive link instead.

If you have any questions about setting up or using the Report Archive feature in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

The importance of ongoing monitoring of vendor relationships

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A crucial aspect of the Third-Party Relationship Life Cycle that is often overlooked is ongoing monitoring. Regularly monitoring vendors is vital for managing external risks and making sure that third parties adhere to compliance and performance standards throughout the duration of the relationship. The frequency of monitoring your vendor management program depends on various factors, such as the type of business relationship, vendor risk rating, vendor performance, and regulatory obligations.

To effectively monitor your vendors, begin with a risk assessment to evaluate the inherent risks they pose when introduced to your operations. This assessment will pinpoint areas that need careful oversight and establish how often you should conduct reviews, depending on the vendor’s associated risk levels. Next, define your monitoring criteria according to the vendor’s risk level. Establish thresholds and alert mechanisms within your monitoring system to identify any deviations from these criteria, enabling you to respond quickly to potential issues.

When establishing a monitoring process, choosing the appropriate third-party monitoring solution is crucial for supporting continuous oversight. Strunk’s Vendor
Manager software enables you to tailor your ongoing monitoring categories according to risk levels, automating the entire process. This improves efficiency and minimizes missed opportunities. Strunk’s software also helps track deviations and gives feedback on the vendor’s performance.

Ongoing monitoring is crucial for managing vendor risks, ensuring that vendors fulfill their contractual obligations, and adhering to regulatory standards. An effective vendor monitoring process enhances your overall vendor management program. Additionally, it serves as one of your most valuable tools to address minor issues before they escalate into major ones. Click here for more information.

Tracking Vendor Due Diligence Material

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How does your financial institution manage the tracking of vendors’ due diligence materials? Is there a centralized repository for these documents, or are they merely stored in folders on your computer? It’s important to note that Strunk’s Vendor Manager software offers a hosted solution designed to help financial institutions consolidate vendor due diligence materials into a single, central location.

Vendor due diligence materials include essential information about a vendor’s corporate history, financial status, legal structure, compliance record, operational capabilities, and potential risks of the partnership. A centralized repository for these materials removes the need to consult multiple sources, ensuring the information remains accurate, up-to-date, and easily accessible.

Key benefits of having a centralized repository:

  • Enhancing data accuracy and consistency: By keeping all due diligence documents in one location, the risk of conflicting or outdated information is reduced, ensuring that everyone utilizes the most reliable details for each vendor. This approach allows departments involved in vendor selection to share information effortlessly and collaborate on materials, ensuring everything stays current.
  • Streamlined review process: With all due diligence materials in one accessible location, reviewing vendor information is more straightforward, saving time and effort. This arrangement also simplifies the provision of necessary documentation during audits for your vendor management program.

Strunk’s Vendor Manager software establishes a centralized repository for your financial institution’s due diligence materials, granting swift access to all pertinent vendor information and significantly speeding up the decision-making process. Check out our site to learn more: https://strunkaccess.com/compliance-software/#vendors.

Reporting on Charge-Off Items and Recoveries

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ODP Manager generates the Account Closed letters necessary to notify customers when accounts are closed and charged off due to unpaid and outstanding overdrafts or due to a default on a Fresh Start Repayment Plan for outstanding overdrafts. Closed accounts typically no longer appear in the daily extract file imported into ODP Manager; however, users are still able to manually track charged-off accounts and recoveries in the hosted software.

Once the account is charged off, a user can create a charge-off item that includes the date, charge-off principal, charge-off fees, charge-off reason, and item status. Notes can be added to the item at the time of charge-off and notes can continue to be updated throughout the recovery process. As recoveries are made, they can be entered in ODP Manager. This will reduce the charge-off balance remaining.

The C/O Items and Recoveries summary page can be accessed under the Account Inquiry menu. This page, by default, displays the charge-off items for the last year. If a different timeframe should be displayed, institutions can request a customized default timeframe. The start and end date for the charge-off items can also be changed by the user at any time.

The summary reporting displays basic account and charge-off information and can be exported as an Excel file or as a PDF. The PDF format also includes overall totals and totals by branch.

If you have any questions about using the Charge-off Items and Recoveries feature in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Working with a vendor like Strunk is the key to establishing a successful vendor management program

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Increasingly, financial institutions are outsourcing to benefit from reduced costs, enhanced flexibility, and improved efficiency while optimizing their resources and expertise. When a financial institution opts to outsource a task, its board of directors must ensure effective oversight and implement adequate controls. To create a robust vendor management program, the board should take into account the following activities.

Initially, the board of directors must define clear goals and objectives for their vendor management program. This includes determining the organization’s specific needs and requirements, assessing potential vendors, negotiating contracts, and overseeing vendor performance. Once established, the financial institution can formulate policies and procedures for the vendor management program. It’s crucial to devise a thorough plan that encompasses the entire vendor management process, from vendor selection to contract termination. Strunk’s Policy Manager software serves as a structured, centralized source of truth for your financial institution’s vendor management policies. Additionally, Policy Manager can document all procedures related to vendor management, encompassing links to policies, assigned responsibilities, automated change logging, and multiple file attachments.

After outlining the goals and objectives for a financial institution’s vendor management program, it is beneficial to employ vendor management software to enhance operations. Strunk’s vendor management software simplifies the automation of vendor management processes. This tool helps you organize your reviews and offers insights into the products and services provided by vendors. Furthermore, it acts as a contract repository and issues reminders for contract renewals. Our software also aids in conducting gap analyses of vendor contracts to identify any discrepancies.

Next, it’s crucial to carry out risk assessments to determine the risks associated with each vendor. Strunk’s vendor manager software will help you proactively manage vendor risk through assessments and tiering. This approach allows your financial institution to prioritize higher-risk vendors, enabling more frequent and thorough monitoring of these vendors. Once your financial institution identifies the risks linked to a vendor, it is crucial to be aware of the controls the vendor has implemented to manage those risks. Strunk’s vendor survey facilitates this process and helps you comprehend the vendor’s potential residual risks.

In a vendor management program, conducting due diligence on each vendor is crucial. You should evaluate aspects such as their financial stability, reputation, understanding of banking regulations, and overall performance. Strunk Vendor Management can streamline this process through our monitoring system and document retention for due diligence.

If it’s vital for your financial institution to collaborate with a skilled vendor who delivers dependable service and comprehends regulatory requirements for your automated vendor management process, reaching out to Strunk is key. We are here to offer consulting and the necessary tools to establish a successful vendor management program.

Save Consumer Reg E Opt-In and Opt-Out Documentation

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In order to provide evidence that consumers have provided confirmation to opt in for ATM and everyday debit card transactions, Strunk recommends that financial institutions have consumers sign or initial the A-9 form (Consent for Overdraft Services) for opt-ins by mail or in person, record and retain consumer opt-ins by phone, and store opt-in transactions and electronic signatures for consumers who opt in online or by mobile device.

ODP Manager has added the capability to help institutions attach and organize this information in the hosted software. Each account will now have an Attachments tab in the account view which will allow users to manually upload or link the proof of a consumer’s Reg E election. For each attachment, users will select the Type of attachment (Opt In / Opt Out / Other), the attachment Source (Scan / Recording / Other), and the Attachment Date. PDF, image file, and audio file formats can be attached and saved. Once saved, these files can be viewed or listened to when viewing an account’s attachments.

For institutions that use Strunk’s online opt-in process, ODP Manager now will display open accounts that match the consumer’s submitted partial account number(s). Users can use the displayed name, address, phone, and email information to identify the correct account number to update the Reg E election in the core accordingly. Once the ODP Manager user has identified the matching account number, the transaction and electronic signature record can also be linked to the account in the hosted software and the verification will display on the Attachments tab.

Strunk has added these new options in ODP Manager to provide financial institutions with additional methods to organize and track their Reg E-related documentation. If you have any questions about using the new Attachments feature in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

An independent certified public accountant has examined Strunk’s operations and found them to be in compliance with the AICPA’s Trust Service Principles. It was determined that Strunk meets the Security, Availability, Processing Integrity, Confidentiality, and Privacy criteria for SOC 2 established by the AICPA.