Taken Your Eye Off the Overdraft Protection Ball?

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Have you been worried about taking advantage of account holders in a pandemic environment? Not clear on what regulators expect in terms of accommodating customer hardship situations? The last 14 months certainly haven’t been easy on our account holders. The last thing we want to do is appear to be taking advantage of a bad situation by pushing the envelope on overdraft fees. But where is the right balance? Strunk can help.

We don’t charge a contingency fee – so we’re not going to push you to generate more fees if you think that’s not the right thing for your client base. We also charge a very affordable fixed annual fee – so you don’t have to feel like you should justify the price you pay the OD vendor by driving more fee income. Our goals are to maximize the performance of your program – based on your strategy – and also to ensure compliance.

With StrunkAccess receive the latest hosted ODP Manager software, which will facilitate the generation of proper notifications & reports when they’re needed. ODP Manager is the most powerful tool available to help financial institutions get the most benefit out of their overdraft programs and remain in full compliance with the law. It is provided as a cloud-hosted application, taking full advantage of the latest software developments and eliminates the need for users to maintain a separate application in their own network environment.

Get started today by contacting us at info@strunkaccess.com or 800-728-3116.

Employee Overdraft Privilege Training

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As more and more states are reducing their Covid-19 restrictions, we are seeing an increase in employees from financial institutions going back to face-to-face work environments. As workers start returning to their workspace in a safe fashion, this is a great time to have some additional training with your employees regarding your Overdraft Privilege program.

Strunk offers ODP training that is specific for your financial institution.  With each session tailored to your financial institution we can help identify issues that you may be having with your program while also ensuring that your employees fully understand the benefits of the overdraft privilege program. During this ODP training will review how to fully explain the ODP program to customers/members and this will prepare your employees to answer questions that they may receive regarding the program. The ODP training is excellent for both new staff that needs to learn about the service as well as a refresher training for other employees.

Another important item that Strunk covers with its training is the compliance perspective surrounding the program. We are all aware that Overdraft Privilege has been under the microscope of the CFPB, and we would like to make sure that your financial institution stays safe from any regulatory issues. Strunk’s training can be done in person and is still being offered as a webinar, which gives financial institutions the flexibility to choose how they would like their staff to be trained.

If you would like additional information on Strunk’s employee Overdraft Privilege training, please feel free to contact us at 800-728-3116 or info@strunkaccess.com.

Event Tracking in ODP Manager

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A benefit of Strunk’s hosted ODP Manager is that certain significant account events are automatically tracked. There are three main types of events stored in an account’s history.

Each time a user imports an updated extract file into ODP Manager, significant account status changes are marked. If an account is now closed, if it is now overdrawn, or if it has now moved into good standing, an event is recorded. If overdraft limits have been assigned or removed or if an account has changed its Reg E election to opt in or opt out, ODP Manager will note the account.

Each time a user generates a letter, the hosted software updates the account’s history. The letter type, description, and date are recorded. A PDF of the letter is also retained and linked to the event history.

What happens if there are important events related to ODP that are not already marked based on the import or by a letter? ODP Manager users have the ability to create their own comment or reminder events. Notes can be saved to the account as a comment. Reminders can be created for follow-up items with a specific due date. Both comments and reminders are accessible to all users and can include attachments.

Within ODP Manager, events can be reviewed for a specific account or they can be looked up for a specified date range. The results can be exported to a PDF or Excel file.

Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about ODP Manager’s advanced event history tracking.

Putting the CFI’s Low Cost of Funds to Work

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Financial institutions across the country are enjoying a low cost of funds and many CFIs are looking for ways to deploy deposits profitably. As the Federal Reserve continues a pattern of low interest rates and with the high level of liquidity on the bank’s balance sheets – what can you do to increase net interest margin?

Community banks and credit unions have been sitting on the sidelines as financial technology firms have taken over the buy now pay over time business that proliferated during the COVID-19 pandemic. Consumer online purchases increased dramatically in 2020 since many retail businesses encouraged them or consumers stayed home.

Large retailers have adapted their payment processes for millennials and Gen Z’s who aren’t keen on using credit cards by allowing their customers to make fixed monthly payments over a 3-24 month period. Transparency, no hidden fees and the ability to make predictable monthly payments are reasons consumers like these new programs. Until now banks have had no way to compete for these profitable relationships.

Strunk is thrilled that we partnered with Quilo to bring to market the ability for banks to make these loans that their customers are currently getting elsewhere. Our turnkey, smart phone application is easy to use for online or in store purchases. Likewise, consumers can pay off high interest rate credit cards with the Quilo program.

If your financial institution has a low net interest margin, low cost of funds, and a desire to see what your customers are already using in the digital lending space give us a call to let us show you how our program works. The low touch, high yield lending platform is innovative and easy to manage.

Spotlight On: FINSYNC

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FINSYNC is the only all-in-one payments platform that helps businesses get all their finances in sync, centralize control of cash flow, and get in sync with the right financial professional at the right time.

Grow in new and empowering ways when you combine innovative software with unmatched services.

FINSYNC’s payments platform helps businesses centralize control of payments, automate accounting, process payroll, and manage cash flow, and connect with members of the FINSYNC Network for banking, financing, accounting and insurance needs.

In his most recent annual shareholder letter, Jamie Dimon, JP Morgan Chase’s Chairman and CEO, called out the fact that software companies becoming banks themselves is an enormous competitive threat to our industry.

The threat is not new or news. The bold terms, however, coming from the largest bank with presumably the largest software development budget, make it worth every other community financial institution taking notice and action.

At Strunk, we want to help you to act and within your own budget. This is why we are calling out a special vendor we have been following. FINSYNC is helping financial institutions of all sizes compete for commercial/business relationships and win. Their program is not only unique on that basis alone, but it requires no upfront investment or integration and can deliver a quick return on time.

  • No cost to you
  • Acquire more customers
  • Increase revenue
  • Improve retention

FINSYNC helps financial institutions counter the threat that is now Intuit’s QuickBooks becoming a bank, which is by itself an enormous competitive threat to the all-so-important relationships you have with your business customers.

According to Dan Roderick, Strunk CEO, “The FinTech threat facing our industry is all too real. In my 40 years in banking I’ve never seen anything that has created a risk of this magnitude. Strunk is in the unique position of being able to bring solutions to our clients that will help community FIs combat the FinTech challenge.”

If you have not already partnered with FINSYNC or considered their program, please be our guest. We see this as a huge value to all of our clients and so we’re sponsoring a series of webinars so that you can learn more. Simply click here to sign up for a session that suits your schedule.

For more detail on the FINSYNC product please click here or email us at info@strunkaccess.com.

For Clients: Account Details in ODP Manager

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In Strunk’s hosted ODP Manager Account Inquiry section, you are always able to review the account level data that is imported daily from your core extract file. Account Inquiry is also where ODP Manager retains the historical information about closed accounts.

Users are able to combine different column views, query groups, and filters to identify accounts that meet desired criteria. Once the list is compiled, it can be exported to Excel to be saved or for distribution. Users can use this ability to get account level detail to supplement ODP Manager’s existing standard reports.

In addition to allowing ad hoc lists of accounts, Account Inquiry will also allow you to access the information for a single account, whether the account is open or closed. You may need to review an account’s contact information, event history, reminders, or comments to manage the account. If the account is under a Fresh Start Loan or has charged off, you may need to view the related repayment schedule or charge-off items and recoveries.

Make it easier for users to access information, review, and manage ODP Manager accounts by utilizing the Account Inquiry feature. Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about Account Inquiry.

How does a CFI Compete with the BNPL Providers?

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The number of consumers who use a BNPL (Buy Now Pay Later) service has skyrocketed in the past 12 months. Consumers like these programs since they want simple monthly payments to give them the satisfaction of paying off a purchase rather than credit cards that can become “evergreen”. Unfortunately community financial institutions (CFIs) have missed out on this opportunity but it is not too late.

Millennials and Gen Z’s are an age group that is sought after by most financial institutions. Many of these people are scared of credit cards since they never seem to get them paid off. There are late payment penalties, high interest rates, and the minimum payment allows borrowers to pay off the balance in 15 years or more. Now there is a service you can provide.

Quilo is a turnkey service for financial institutions to provide small dollar consumer loans for purchases over $250. The high yield low touch loan program is not designed to cover everyday expenses like overdraft privilege programs do.

Your customer needs a new water heater or new tires. They have savings at your financial institution that they can use or they can use a credit card to pay for the expense. They don’t want to zap their savings for this unexpected expense and they don’t want to use their credit card with a high interest rate. Quilo provides a better alternative to either of these options.

Quilo loans are funded by your CFI and they offer a low rate, simple fixed payment, no prepayment penalty, and no late fees. Exactly what your customers want and need.

To learn more about Quilo please contact Strunk at info@strunkaccess.com or 800.728.3116 for quick demo of the Quilo Instant Installment Loan Program.

Strunk at the ABA’s Virtual Risk Management Conference 2021

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We’re getting the hang of these virtual events at Strunk!  Strunk attended the ABA’s annual Risk Management conference last week. During the virtual event we hosted a virtual booth, met with many familiar and new faces via Zoom meetings and attended virtual sessions. We enjoyed the opportunity to connect with bankers across the country.

We welcomed the opportunity to discuss with attendees the latest features offered by our Governance, Risk Management and Compliance (GRC) software Risk Manager, which includes six GRC tools – Risk Assessor, Policy Manager, Controls Manager, Skills Manager, Issues Manager and Vendor Manager.

A state of the industry was provided by Dr. Catherine Mann, currently the Global Chief Economist for Citibank. The session included an update on the economy, focusing on pandemic recovery in all key sectors. She also shared thoughts on key economic risks for financial markets and how this impacts risk mitigation efforts. The session also included a keynote address by Rob Nichols, President and CEO of the American Bankers Association.

Attendees had the opportunity to discuss post-pandemic risk management, among many other topics. Bankers were encouraged to reassess and modify risk management frameworks as a result of the pandemic, especially reviewing and adjusting risk appetites and associated metrics.

Congratulations to the winner of Strunk’s giveaway, a $100 gift card to Amazon – Linda Schnitzler of The Canandaigua National Bank and Trust Company!

We hope to see you all in person next year. Until then, stay well.

Do Business Accounts Have To Opt In To Reg E?

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Over the years Strunk has been asked a number of times, “do business accounts that have overdraft privilege have to opt into Reg. E to have their debit card point of sale and ATM transactions covered in the program?” To understand this you must first understand that most consumer protection rules do not apply to deposit accounts held by a business. It is also important to understand that a business-purpose account can be held by a legal entity, such as an LLC or a corporation, or by individuals operating a business themselves as a sole proprietorship.

We need to take a look at Regulation E and break it down regarding this topic. The coverage of Reg. E is stated in section 1005.3(a). It applies to “electronic fund transfers” that debit or credit a “consumer’s account.” Paragraph 1005.2(b) (1) defines an “account” as a consumer asset account established primarily for personal, family, or household purposes. Paragraph 1005.2(e) defines a “consumer” as a natural person. The result is if an individual is using their deposit account for the purposes of operation a sole proprietorship or an account is held by a legal entity, it would not be covered by Reg. E either.

Reg. E coverage means that the “opt-in” for overdraft coverage of debit card point of sale and ATM transactions only applies to consumer accounts. Any application of the concept to other accounts (such as business accounts) is a matter of bank policy and should be addressed in the bank’s deposit account agreement for such accounts.

Why has your Financial Institution missed out on Small Dollar Installment Lending?

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Community banks and credit unions have been shut out of the small dollar installment lending business due to the cost of taking an application, getting a credit bureau report, underwriting the loan, getting documents signed, funding and servicing the loan. Industry experts say that the cost to underwrite consumer loans typically runs $150 or more, with annual servicing cost running as high as $180 per year…doing it the ‘old school’ way.

Strunk has partnered with Quilo to provide a digital platform to make instant consumer loans for online or point of sale purchases. Large mega banks and FinTech companies have been offering these types of loans for several years and community financial institutions have been unable to keep pace. The Buy-Now-Pay-Later “BNPL” business is booming across the nation and Millennials, Gen X, and Gen Z’s are using the service…just not with your financial institution.  UNTIL NOW!

Quilo provides an opportunity for your institution to increase loans, net interest income, and offer an exciting service that consumers love, all from an app on their Smartphone. It allows consumers to make purchases and pay for them over a 3-24 month timeframe. It takes the stress out of lending…consumers don’t have to share their soul to borrow $500 and the financial institution doesn’t have to stress over telling them we don’t make small loans.

With tremendous growth potential in this segment of installment lending it doesn’t take long to show you how this would work for your financial institution. Take back the consumer lending business from the big banks and FinTech companies.

To learn more about Quilo contact Strunk at info@strunkaccess.com or 800.728.3116 for a quick demo of the Quilo Instant Installment Loan Program.

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.