Save with Strunk’s Effective Risk Management Tools

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Strunk is best known for our fee income improvement programs, including Overdraft Privilege, Rewards Checking and Value Checking. Strunk is also well known for assisting community financial institutions with their risk management and compliance processes using our software.

Strunk offers five comprehensive, easy-to-use, and affordable compliance management tools:

Risk Assessor helps prepare comprehensive risk assessments consistent with regulatory or other requirements, in days, not weeks.

Policy Manager organizes all policy documents into a single database, mapped to the relevant standards and control procedures.

Controls Manager schedules tests of policy compliance and tracks test results.

Vendor Manager is a specialized tool for managing vendor risk that standardizes risk assessment methodology and organizes all vendor related documentation.

Issues Manager is a centralized database for tracking all compliance issues and incidents across your entire organization.

According to Dan Roderick, CEO, “Strunk’s Risk Manager solution brings efficiency to the process and allows our clients to focus on their highest areas of risk. The solution is comprehensive but simple to use, which is something I wish I’d had access to in my days as a banker.”

All our tools are securely and reliably hosted with Amazon AWS, making them available on a variety of devices from anywhere. Risk Manager facilitates remote work and will greatly enhance your internal control and risk management processes and save time – all for one low annual fee.

If you are paying another vendor an annual fee for any one of these tools today, invest just 30 minutes to review our solution suite. We can add valuable services – and may be able to SAVE you money as well! Check out our tools today: https://strunkaccess.com/compliance-software/

Consumers Continue Wanting Access to ODP

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Consumers desire Overdraft Privilege as a financial product due to the wide array of choices available to them. In a Morning Consult survey, it was found that 9 out of 10 consumers consider their bank’s overdraft privilege valuable. So, what makes this product so valuable to consumers?

  1. Consumer’s payment will clear instead of being returned, which can be less expensive. Sometimes consumers make mistakes when paying bills and accidentally overdraw their account. Because the consumer has overdraft privilege, the bills are paid instead of returned and it prevents late fees, NSF fees, and re-presentment fees. Overdraft privilege provides relief to consumers by ensuring their bills are paid, even if they miscalculated their bank account balance or forgot about a pending payment that hasn’t cleared yet. This feature significantly reduces their worries and potential financial stress.
  2. Consumers will have funds available if they need them. Although it is generally not advisable, there may be situations where overdrawing your bank account is necessary. For example, let’s say it’s the weekend and the banks are closed, and you have an emergency that requires a visit to the hospital. However, the emergency room won’t provide treatment until you pay a $100 co-payment. Unfortunately, you only have $10 in your checking account. Fortunately, you have overdraft privilege, which means you can make the payment even if it incurs a fee.
  3. Not being embarrassed because of returned payments. When you use overdraft privilege, the recipient of your payment won’t know that your bank account has insufficient funds. Instead, they will see that your payment has been credited as expected.

Despite Congress trying to modify overdraft services, we recognize the importance and necessity for consumers to have access to such programs. Overdraft services provide a significant source of liquidity for many Americans. By having access to overdraft privileges, consumers can be assured that they can make timely payments for their rent or utility bills, thus preventing any late fees, utility shut-offs, or even eviction

Hosted ODP Manager and Institution IP Address Validation

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Strunk recommends as a best practice that institutions provide a list of IP addresses or ranges that are permitted to access the Strunk software. This ensures that users not only have a valid username and password, but also are logging into the software from an allowed IP address. Strunk can configure this feature once an institution’s allowed public IP addresses are provided.

When this option is configured, a user’s IP address is checked at login against the list of allowed IP addresses. If the IP address is not on the list, an error is displayed that shows the current IP address of the user. If the user later logs in from an allowed IP or if the IP address is added to the Allowed IP address list, the user will be able to log in successfully.

As an alternative to providing a list of allowed IP addresses, the hosted ODP Manager software can require a user to provide a PIN. If the IP address is new for the user or if the IP address has not been verified by the user in the last thirty days, a PIN number will be required. The user will request a PIN be sent to the email on record. Once the PIN is entered, the user will be able to login. Strunk can configure this feature upon request.

If you have any questions about these options in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

Strunk’s Loan Pricing Solution Will Increase Income

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Over the past 30 years Strunk has helped over 1,800 community financial institutions increase income with a variety of innovative products and services. Their most recent solution is a loan and relationship pricing tool that will increase your bank’s net interest margin.

Starting in 1993, Strunk was the pioneer in overdraft privilege programs which turned out to be the best fee income idea in the history of our industry. Bankers would say “How can we increase fee income with a formal overdraft program without raising prices?” Our strategy substantially increased fee income while consumers benefited at the same time by not paying the retailer’s fee for returned checks.

Then in 2007, Strunk became an original investor in BancVue which later changed their name to Kasasa. Bankers would say “How can we afford to offer 6.5% on a checking account without cannibalizing all of our accounts and increase our debit card transactions at the same time?” Guess what, the reward checking program (Kasasa) doubled debit card transactions, increased the number of accounts using online statements, and new deposits far outweighed cannibalized accounts.

Prior to Dan Roderick’s, Strunk’s CEO, group purchasing Strunk in 2013 he ran the largest loan pricing solution in the market. It was very expensive yet very popular. Working with over 400 banks across the country, he helped them their net interest margin with very little effort.

Strunk’s loan pricing solution is very inexpensive, easy to use, and will increase your bank’s bottom line, just like what we have been doing for our industry since 1993.

Contact Strunk 800.728.3116 or at info@strunkaccess.com to learn more about our loan and relationship pricing solution.

Use ODP Manager to Inform Customers about Reg E Opt-In

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On consumer accounts, ATM and everyday debit card transactions cannot be included in Overdraft Privilege unless the customer has opted in. Customers can opt in for Reg E at account opening but they may also opt in later. The four options to opt in for the ATM and everyday debit card coverage are: in person at a branch, over the phone, by mail, or electronically.

The Consent Form for Overdraft Services (A-9 form) informs customers about what they need to know about overdrafts and overdraft fees. It also reiterates a customer’s options for opting in and provides them the form to submit by mail. ODP Manager allows institutions to provide an account’s Regulation E Opt-in Status in the file that is imported daily. This allows the hosted software to send different letter templates to customers who have opted in or not opted in for the ATM and everyday debit card coverage.

Strunk’s standard letter templates for the Welcome and Reinstatement letters include the A-9 form for customers who have not already opted in. The Reg E Opt-in Followup Letter template is also provided so that customers with OD limits that have not opted in receive information about ATM and everyday debit card coverage opt-in at least once a year. If a customer has already opted in, their letters highlight that they already have the ATM and everyday debit card coverage. By allowing customers the Reg E opt-in information when overdraft limits are assigned, when overdraft limits are reinstated, or annually, ODP Manager may allow customers to have more opportunities to opt in for Reg E.

ODP Manager can also allow customers to submit their Reg E Opt-in election electronically. Strunk would create an online form that mirrors an institution’s A-9 form. This form would then be linked directly from an institution’s website. Email confirmations are generated when forms are submitted. The submissions are tracked in ODP Manager so that users can generate a list of accounts that need an updated Reg E election.

If you have any questions about the Reg E Opt-in form options in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

Vendor Management Breakdown

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Over the years, banking partnerships with FinTechs have grown in number and complexity. Third-party risk management has become a growing focus for supervisory and enforcement agencies in recent years. To facilitate the increase in such relationships, the Board of the Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), have released a final joint guidance to assist institutions in mitigating risks linked with third-party relationships.

Although it is stated that the guidance does not have the authority to impose new requirements on banking organizations, each agency will still assess their supervised banking organizations’ risk management of third-party relationships as part of their regular supervisory procedures. This includes evaluating the level of risk and the effectiveness of risk management to ensure that all activities comply with relevant laws and regulations and are conducted in a secure and sound manner. The guidance also emphasizes that corrective measures, such as enforcement actions, may be taken by the agencies if there are any violations of laws and regulations or unsafe banking practices by the banking organization or its third party.

Strunk’s Vendor Manager software has undergone a review to ensure that it aligns with the Final Guidance for efficient management of third-party relationships. Strunk has proposed some areas of improvement to enable our clients to clearly outline the structure of each third party and identify potential risks, as well as the appropriate measures to manage them easily. With our latest release on September 6th, 2023, you can view the new upgrades that have been added.

Here, you can find a document comparing the Interagency Guidance of Third-Party Relationships: Risk Management with Strunk’s Vendor Manager software. https://app.strunkaccess.com/v2/document/347

Loan Pricing Tool That Will Increase Net Interest Margin

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Historically, loan pricing solutions for community banks were not affordable and only the larger or regional banks used them. The competition for lending generally dictates the rate offered to the customer. There are several factors that go into loan profitability but the three main drivers are the risk of the borrower, size of the loan, and term of the loan.

Here is an example of how a loan pricing solution can help your bank win more deals. A community bank shared a recent deal that they lost due to pricing/structure of the loan. The bank had a client that was purchasing a dump truck and wanted to borrow $100K. The bank offered Prime – 1% (7.5%) fixed with a five year amortization and a 1% upfront fee. The borrower who had $25K in deposits and no other relationship only wanted to pay 7.25% with no fee on the loan.

The bank did not have a pricing solution to determine the profitability of the loan/relationship so their line in the sand was Prime – 1% with a $1K fee. The borrower went elsewhere for the $100K loan (the $25K deposit hasn’t left the bank yet…as of this writing) and the bank lost out on the interest income.

After running the loan opportunity through Strunk’s Loan Pricing solution, the bank should have made the loan at 7.25% with no fee since it would result in a 17.95% annualized return…rather than let their customer go somewhere else. The net income from this one lost loan opportunity would more than pay for the Strunk loan solution for a whole year.

Now is a great time to look at an inexpensive, easy to use loan pricing tool to see if it is a fit for your financial institution. Increasing your Net Interest Margin is easy. Contact Strunk at 800.728.3116 or at info@strunkaccess.com to learn more about our loan and relationship pricing solution.

Know the Importance of a Relationship’s Profitability

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Pricing can be a challenge for all community financial institutions. Most CFIs overprice their largest, most valuable customers and underprice their smaller, least profitable customers. This can be an alarming prospect, since as a result we end up giving the best deal to those who contribute the least to the bottom line and at the same time run the risk of losing our most profitable relationships.

Understanding the drivers of profitability on commercial customer relationships and making decisions based on that knowledge is of the utmost importance. Strunk’s Pricing Manager solution provides a robust relationship profitability feature to assist with determining the profitability of each customer quickly and easily.

The solution contains ROE targets that are used to determine the return on capital. ROE is what really matters most to our shareholders. These targets are customizable by product type and not only drive profitability, but also consistency across all loan types and lenders. Additionally, utilizing these drivers effectively will allow you to structure deals that work for the bank while at the same time, work for the borrower as well.

Strunk’s Pricing Manager also allows users to model the deposit relationship associated with each borrower and will illustrate whether that deposit brings any pricing power to the overall relationship. Positive profitable deposits add value for the bank and a pricing tool prevents lenders from using deposits as an excuse to price down a loan.

Pricing Manager is a powerful tool, it is affordable, and comes with a Money Back Guarantee! Contact us today at 800-728-3116 or info@strunkaccess.com for a demo of the all-new Pricing Manager or click here to learn more.

Viewing and Exporting Summary Information in ODP Manager

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Strunk’s hosted ODP Manager software utilizes the information contained in the daily extract file to assist users in the daily tasks of generating Collection and Custom letters and reviewing customer accounts for Overdraft Privilege limit assignment or removal. The software also includes a standard suite of Management Reports that can be used daily, monthly, or quarterly to monitor and review the data important to running a successful Overdraft Privilege program.

There are two important metrics to focus on related to ODP program performance: percent of accounts with an ODP limit and percent of accounts opted in for Regulation E ATM and everyday debit card coverage. When logging in to the hosted software, these metrics show on the Dashboard. There is a comparison between the institution’s benchmark values and other Strunk clients by the 25th, 50th, and 75TH percentiles. The trend for the Percent with Limit and the Percent Opt In is also updated monthly. Both the Dashboard benchmarks and the trend information can be exported as a PDF. More detailed summaries by branch and by product can be reviewed on the Utilization Analysis and the Opt-In Impact management reports.

Some of the management reports include account-level detail: Overdraft Aging, New Accounts, ODP Status Tracking, Fresh Start Tracking, and ODP Heavy Users. When ODP Manager shows a list of accounts in reports or in Account Inquiry, users have the option of using column filters or groups to limit displayed results to specified criteria. These reports can be exported to PDF in Reports or to Excel in Reports and Account Inquiry. The option to filter allows users to leverage the data included in the extract file to monitor a smaller group of accounts – even if there is not an existing report.

In addition to searching results at the account level, ODP Manager also allows users to search events records. Import events such as accounts becoming overdrawn or in good standing, OD Limits assigned or removed, or Reg E opt ins or opt outs can be searched using filter criteria or date ranges. Filtering by event details or date ranges can also be done for user events such as letters generated, comments, or reminders.

If you have any questions about options to view and export your data in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com to find out more.

Defining Continuous Overdraft Fees

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What exactly are continuous overdraft fees, and how could they potentially impact your Overdraft Privilege Program? It is important to be aware that certain financial institutions apply continuous overdraft fees, also known as daily overdraft fees. These fees are charged on a periodic or daily basis for as long as the account remains overdrawn. Currently, the financial service industry is actively discussing the problem of continuous overdraft fees. This is mainly due to the numerous lawsuits filed against financial institutions regarding their predatory overdraft practices.

Regulators have found that Overdraft programs which charge a fixed or periodic fee for not resolving a previous overdrawn balance can be unfair and deceptive, according to Section 5 of the FTC Act. This is especially true when the financial institution doesn’t disclose the situations in which customers could incur these fees accurately. These practices make it harder for consumers to avoid the fees by bringing their account balance back to positive if they’re facing cash flow issues.

If a financial institution intends to charge continuous overdraft fees, it must first review the information they provide to its consumers about overdraft services. According to the CFPB’s guidance, if a financial institution’s disclosures state that overdraft fees may be charged “after” a specific number of days, the financial institution should consider whether their system guarantees that such fees will not be charged on or before the indicated day. Therefore, testing transactions is crucial to ensure that the fees charged are clear and understandable to the average consumer. Additionally, the CFPB guidance advises financial institutions to consider how they handle continuous overdraft situations that occur over weekends or holiday periods where the final day to cure an overdraft falls on a non-business day. The guidance explains that if a financial institution assesses a fee based on calendar days but only allows overdrafts to be cured on business days, it could be problematic if the financial institution’s disclosures state that consumers have a certain number of days to cure an overdraft before a fee is assessed.

What happens when financial institutions charge continuous overdraft fees? This practice has faced regulatory scrutiny and lawsuits against financial institutions. Strunk acknowledges the potential risks involved in imposing such fees, and it’s crucial for all institutions to be aware of these issues. If your financial institution is still charging a continuous overdraft fee, it may be beneficial to contact Strunk at info@strunkaccess.com for assistance with our overdraft privilege 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.