Tracking Vendor Due Diligence Material

/in , , , , , , /by

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data accuracy and consistency: By keeping all due diligence documents in one location, the risk of conflicting or outdated information is reduced, ensuring that everyone utilizes the most reliable details for each vendor.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

/in , , , , , , /by

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.

Strunk Helps Banks Make More Money

/in , , , , , , , /by

For the past 31 years, Strunk has helped financial institutions make more money by providing services to their customers that they want and need. The Strunk Overdraft Privilege program was implemented in over 1,800 banks across the country and it provided a much needed service. Banks typically charge the same fee whether they pay or return an insufficient funds item. Who would want their checked returned to the merchant? Our hosted ODP solution helps with collections and tracking the success.

Since 2011, Strunk’s Secure Checking program has helped hundreds of banks provide features to their consumer checking accounts for a small monthly fee. Here again consumers like the benefits offered and they don’t mind paying for them. In many cases those same consumers are paying quite a lot more elsewhere. Much like the Overdraft Privilege strategy, Secure Checking generates a considerable amount of customer loyalty and goodwill while the bank increases fee income by at least $50 per account per year.

Pricing commercial loans to meet the customer’s needs and to meet the profitability goals of the bank is yet another way Strunk helps banks make more money. Most banks typically price loans on risk, term and type of loan. But, should the size of the loan and fees be considered? Having a tool to help your bank win more deals and price smaller loans to ensure profitability can increase net interest income by 25 bp or more.

Contact Strunk at 800.728.3116 or email at info@strunkaccess.com to find out more about our proven strategies to increase income. Our solutions are easy and inexpensive to implement. Have a great holiday season and may 2025 be a great year for banking!

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

/in , , , , , , , /by

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

/in , , , , , , , /by

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.

Community Banks Compete with “Non Banks” as Well

/in , , , , , /by

For decades community banks have competed with credit unions for deposits and consumer loans and other “non banks” like the Farm Credit System for larger land and agricultural loans. Often times you hear bankers say they look down the street when pricing their loans but does that really provide a good way to determine what the interest rate should be?

The Federal Government has been “helping” farmers out for years on agricultural related lending and community banks have to compete for that business. Many times the interest rate on those types of loans seems unreasonably low and hard to compete with. Also, many times the “government” entity might waive fees or not require the borrower to open up a deposit account for the new loan.

Having a loan pricing tool that incorporates fees, rate, repayment term, and credit risk may give you a competitive advantage when competing with these entities. Can you lower the rate if the borrower brings deposits with them? Can you waive the fee and still receive a return that is competitive and meets your profitability target? What terms give both you and the borrower the best deal? How do you know that your lenders are working for the borrower and the bank?

These questions can easily be answered with a loan and deposit pricing tool that many regional and large banks have used for years. To gain a competitive advantage, contact Strunk at 800.728.3116 or email at info@strunkaccess.com to learn about how Strunk’s loan pricing tool will increase net interest income by at least 25bp.

 

Streamline Hosted ODP Manager File Import

/in , , , , , , /by

For ODP Manager to obtain updated account information, an import of the ODP Manager extract file from the core system must be committed each day. Although many institutions manually import the file, there is an option for the upload to occur automatically overnight.

If your core is able to generate your updated extract file automatically to a specific file location at your institution, Strunk can help you set up the Automatic Upload process to run overnight. When your users log in at the beginning of their workday, the updated information is already available, and your users can proceed directly to generating letters and reviewing daily reports.

To use the Automatic Upload, there is a one-time setup process. First, the client that performs the upload will need to be installed. Second, the configuration file needs to be updated with institution-specific information like the user performing the import and the file name. Finally, a scheduled task is created that will run overnight at your institution – initiating the import process at a scheduled time after the close of business.

After the import process completes, users will be notified by email if the process succeeded or failed. Email notifications can be sent to a group email address or to specified individuals. Users will still retain the opportunity to manually import the file. This allows users the option to proceed with a manual import to review the Preview screen for troubleshooting. It also allows them to manually import the file while additional changes may be made to the automatic upload process.

Implementing an Automatic Upload should streamline the file import process and should allow your users to focus efforts on the daily tasks of letters and report review.

If you have any questions about setting up and using the Automatic Upload process in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

How Strunk’s Vendor Manager software can improve contract process efficiency

/in , , , , , /by

Due to business risks and regulatory concerns, managing vendor contracts has become increasingly important. Many financial institutions outsource a wide variety of activities, from professional services to actual products, which exposes them to potential risks and possible income loss. Managing the vendor’s contract from creation through execution and contract renewal is a crucial process in a vendor manager’s lifecycle. With numerous vendor partnerships, it’s easy to lose track of contracts. A robust approach to vendor contract management is essential in today’s regulatory environment. This is where Strunk Vendor Management software can help you improve your processes.

A vendor contract is not just an invoice; it is a business contract between two parties that covers the exchange of goods or services in return for compensation. Vendor contracts outline the terms of the business relationship and specify each party’s responsibilities. This is why managing vendor contracts properly with continuous improvement cannot be understated.

It’s important to have vendor management software that can perform gap analysis on your contracts. This includes providing details on each party’s obligations under the contract, which can help to eliminate potential risks in your relationship with the vendor. Strunk’s vendor contract review ensures that your financial institution meets your organization’s business goals and risk management needs. With Strunk, you can customize the level of detail and comprehensiveness of your contract provisions based on the complexity of the vendor relationship. The gap analysis approach helps your financial institution ensure that the existing provisions continue to address relevant risk controls and legal protections during periodic reviews. Strunk’s software covers every provision listed in the Interagency Guidance on Third-Party Relationships: Risk Management. This helps your financial institution consider the factors and controls that need to be added during contract negotiations.

Strunk’s Vendor Manager can assist your financial institution in managing the entire contract process. It offers a centralized location to store contracts and due diligence material, simplifying access to crucial information for your organization. Additionally, it provides notifications for upcoming contract due dates, enhancing compliance and reducing potential risks, while also streamlining the process for greater efficiency and effectiveness. Visit our site to learn more.

Important Regulatory Announcement

/in , , , , , /by

As you may know, on September 17, 2024 the CFPB issued a circular regarding ‘Improper Overdraft Opt-In Practices’. This circular outlines the CFPB’s guidance related to obtaining Reg E opt-in from consumers. In short, it represents a significant change to the interpretation of Reg E Opt-In requirements.

Since Reg E requirements took effect on July 1, 2010, the practice for obtaining opt-in outlined by Strunk has passed muster with every regulatory authority including the FDIC, OCC, Fed, and NCUA. Over that entire period of time – over 14 years – we have never had a client cited for not properly obtaining Reg E opt-in. The foundation of this practice was essentially twofold – FIs were to provide the consumer with the Reg E A-9 form and then follow up with a notice produced from ODP Manager sent to the consumer confirming their opt-in and once again telling them they have the option to opt back out. The A-9 was to be provided to every consumer upon account opening or request to opt-in. The confirmation notice history is maintained in ODP Manager.

Evidently, after 14 years, the CFPB has determined that in order to provide evidence that the confirmation was obtained from the consumer, the A-9 form must be signed or initialed. They also outline that opt-ins provided over the telephone must be recorded and opt-ins obtained online or via mobile app must be stored and signed with an electronic signature. The specific language in the CFPB circular is as follows:

  • For consumers who opt into covered overdraft services in person or by postal mail, a copy of a form signed or initialed by the consumer indicating the consumer’s affirmative consent to opting into covered overdraft services would constitute evidence of consumer consent to enrollment.
  • For consumers who opt into covered overdraft services over the phone, a recording of the phone call in which the consumer elected to opt into covered overdraft services would constitute evidence of consumer consent to enrollment.
  • For consumers who opt into covered overdraft services online or through a mobile app, a securely stored and unalterable “electronic signature” as defined in the E-Sign Act (15 U.S.C. 7006(5)) conclusively demonstrating the specific consumer’s action to affirmatively opt in and the date that the consumer opted in would constitute evidence of consumer consent to enrollment.

Although the CFPB technically only has supervisory authority over FIs with assets in excess of $10B, and no regulator has the authority to issue new regulations, in the current environment it is our view that it is highly likely that each of the respective regulatory authorities for financial institutions will adopt this same ‘guidance’ and administer their examinations accordingly. That being the case, we urge you to adopt the approach outlined in the three bullets above when obtaining consumer opt-in for Reg E. Specifically, what this means is:

  • For consumers who opt in via postal mail or in person – have them sign or initial the A-9 form:
  • For consumers who opt in via telephone, make sure your calls are recorded, and those recordings are retained.
  • For consumers who opt in online or via mobile device, store the transaction along with electronic signature. Strunk supports an online opt-in process, which can be tracked within ODP Manager. Please contact us if you would like us to configure that capability for your institution.

With respect to existing consumer account holders, the same rules all apply. So, if you do not have the physical evidence outlined above for consumers who currently are coded as opted in for Reg E, you must contact those consumers to obtain the affirmative consent outlined above. If those consumers do not provide the necessary confirmation, we would recommend removing their Reg E opt in from your system and discontinue approving their Reg E overdraft transactions and charging fees.

Use ODP Manager Data to Generate Letters as Needed

/in , , , , , , /by

The hosted ODP Manager software includes three types of letter templates: Collection, Custom, and Ad Hoc letters. Collection letters are sent to accounts that are currently overdrawn with a negative balance. Custom letters are focused on communicating Overdraft Privilege Program-related information to customers. Ad Hoc letters allow ODP Manager users to generate letters as needed without relying on an account event to trigger the letter.

By using Ad Hoc letter templates, institutions can eliminate manual processes of creating and addressing letters outside of ODP Manager. To generate the letter, users will need a list of accounts that should receive the letter template. Each letter template can be generated one account at a time, or multiple account numbers can be entered at once. The customer’s name and address information will populate from the most recent ODP Manager extract file imported. Additional letter data fields can also be populated with information stored in ODP Manager. Once generated, the letter will be retained inside the hosted software just like Collection letters and Custom letters.

If accounts are closed and charged off before the standard number of days overdrawn, users will need to generate an Account Closed letter to appropriately notify the customer. There also may be some specific situations that require ODP-related letters that are not covered by the standard Collection and Custom letter templates. Ad Hoc letters can also be used to generate a customer’s Fresh Start Repayment Plan agreement. The inherent flexibility of the Ad Hoc letter template feature may allow institutions to accommodate all Overdraft Privilege Program-related letters – not just letters included in the standard Collection and Custom letters.

If you have any questions about setting up and using Ad Hoc letters 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.