ODP Manager Features to Streamline your Fresh Start Loan Process

ODP Manager includes tools that may help you manage your Fresh Start Loan process.

For each account in a Fresh Start repayment plan, you can add the Fresh Start Loan repayment schedule. Payment reminders are created that display when due to remind you to check if the payment has been made as agreed. Once the payment is received, you can track the payment amount and date.

Also, you can easily create the Fresh Start Loan agreement using the ODP Manager account information and repayment schedule. Even if you choose not to track repayment schedules, you can still streamline FSL agreement creation by generating the document using ODP Manager.

The standard letter templates include an FSL Default close letter. If an account under a repayment schedule has defaulted and must now be closed and charged off, this letter can be generated and tracked in ODP Manager.

Do you send other Fresh Start Loan letters to accounts in repayment status? An Ad Hoc letter can be created for you to generate as needed – just enter the deposit account number and the letter will pre-fill with the account information. Once it is generated, it is tracked and retained within ODP Manager just like your Collection and Custom letters.

ODP Manager also includes a Fresh Start Tracking report that lists all accounts with a Fresh Start Loan Repayment ODP Status code. Use this report to monitor accounts currently in repayment or to identify accounts that have paid the Fresh Start Loan in full and should be reassigned an overdraft limit.

Let ODP Manager make managing your Fresh Start Loan process easier!

Consistency in Overdraft Privilege Training

Overdraft Privilege programs have been around since the early 1990’s and they continue to benefit both consumers and financial institutions. Consistent and proper training of all employees on the benefits and pitfalls of a successfully run program remains important as we work through the Covid-19 pandemic.

Strunk has always recommended that all frontline personnel be trained on the features and benefits of operating an overdraft privilege program on an annual basis or as needed as turnover occurs. Returning overdrawn items on accounts only causes havoc for consumers and very few people want their paper debits denied when presented, even if it overdraws their account. For electronic debits including ATM and debit card transactions, financial institutions must obtain consumer consent before paying those items that cause an account to go negative. This gives consumers a choice on how they want their account handled.

Training should include the procedures on how your institution handles non-sufficient fund (NSF) items. Make sure that your procedure follows the institution’s policy on NSF items. Each employee opening new accounts should clearly convey how your bank’s overdraft program works. Pursuant to Regulation E, obtain opt-in if a consumer wants electronic items paid at point of sale rather than those debits being denied. Denied transactions keep the consumer from taking the groceries or prescription drugs home when using their debit card.

New accounts personnel also need to clearly discuss the fees associated with overdrawing the account.

Capping the total number of overdraft fees charged on a consumer account on any day is a best practice that is recommended by regulators. Also, waiving fees on small overdrawn amounts is also recommended.

Ongoing training is good for any service that your institution offers and consumer complaints are minimized when policies are transparent and communicated frequently. If you haven’t trained your employees on the features and benefits of your bank’s overdraft payment program, now is a great time to do so.

Can Strunk’s ODP Manager Software Lighten Your Load?

Do you have employees now working from home? If you are using Strunk’s hosted ODP Manager software, this may allow you to adapt to changing work schedules or locations and easily give new users access. If you are a current ODP Manager client but do not have the hosted version, the upgrade is free!

Enjoy the benefits of a hosted solution. No more application software to support on your own network. No more worries about server and other support software becoming outdated. ODP Manager is upgraded monthly – requiring no support on your end – the upgrades are seamless and automatically available to your users. It doesn’t get any easier.

If you need a more efficient file import process, another huge benefit of the hosted solution is that you can import your extract file directly from your core processor while your users are not on premise. We encourage you to take advantage of ODP Manager’s Automatic Upload option – if your core can generate your extract file automatically then Strunk can help you set up the file import for a scheduled time each day. Then the data will already be imported and available when your users start their workday.

You may be unable to print letters every day or you may be trying to prioritize which letters can be printed at home versus ones that can wait to be printed from your normal branch location. Strunk can help you determine which letters are required and which letters may be omitted. We can also help you make any necessary letter content changes.

ODP Manager can save your reports within the software. Ask us to set up archived reports – then you can refer back to the daily reports as you have time available. Implementation of these strategies should help with the remote management of your ODP program.

 

Overdraft Programs During the COVID-19 Pandemic

Overdraft Privilege has been a staple for consumers for the past 27 years and paying items into overdraft status is better than returning them to the merchant or denying the consumer the ability to take home the groceries or prescription drugs.Given the recent circumstances our country is facing Strunk’s Overdraft Privilege program can help consumers and financial institutions get through these difficult times.

In ad hoc overdraft payment programs financial institutions decide to pay or not pay an overdrawn item and whether to charge a fee or not. These types of programs can be discriminatory and may lead to disparate treatment for some customers. In our formal overdraft privilege program those customers who are in the program want their items paid and they don’t mind paying you a fee. In essence you are saving them the return check charge from the merchant or the hassle and embarrassment of being denied at the point of sale.

Certainly there are times when waives or refunds are warranted. Make sure you have a documented policy that outlines the considerations to factor into the refund decision. Also, keep the authority to grant a refund as tight as possible – the more people with authority the greater chance of disparate treatment.

Strunk’s recommended Fresh Start Loan can be used as a tool to help consumers get back on their feet during financial hardships. If a consumer is unable to pay back an overdraft immediately we recommend allowing them to pay it back over four installments. The zero percent interest loan can be used at any time to help consumers pay back an overdraft over time rather than immediately like it is in most financial institutions.

Four installments could be weekly, monthly, bi-monthly or quarterly. Working with your customer to help them work out of a tight cash flow situation will strengthen the relationship and keep the negative information from affecting their credit score. More importantly, you will keep their checking account open under difficult times. Now more than ever, managing the day-to-day overdraft process as a line of business is a must and your customers will appreciate the service you are providing.

Setting the record straight on excessive use

Lately, there has been a lot of confusion around consumers who ‘abuse’ the overdraft privilege program from our clients.  Our clients have asked us what they should do for their consumers who use the overdraft privilege program on a regular basis and what are the recommended compliance and regulatory practices they should follow for these consumers.

The first thing that we tell our clients is that overdraft privilege is a discretionary service, which primarily means that our clients are not obligated to pay any item.  With respect to both making the service available to consumers and taking it away from consumers, it is very important to be very consistent in applying your policy when managing your overdraft privilege program.  We tell our clients if they are not consistent with their program then desperate or discriminatory treatment could result from this action.

It is very important to understand that only the FDIC has guidance around ‘excessive use’ of overdraft privilege programs. If you are not regulated by the FDIC, then there are no specific rules regarding what a financial institution needs to do in case of excessive use.  FDIC regulated institutions need to notify a customer who overdraws their account on more than six occasions where a fee is charged in a rolling twelve-month period.  One thing to understand is there are no requirements to close an account or take any other specific action to accounts that use overdraft privilege on a regular basis.  Examiners or Auditors that push financial institutions to take action on these customers are really taking regulation into their own hands.

Strunk’s recommendation has always been to utilize the specifics that are outlined in our overdraft privilege service policy.  The only reasons for revocation of overdraft privilege are the reasons outlined in the service policy, otherwise coming up with arbitrary reasons to revoke certain customers access could be challenged.

Make ODP Manager Letters and Events Work for You!

Have you considered how you may customize ODP Manager for your institution?

Do your users need the ability to share information about ODP Manager accounts? ODP Manager allows users to create account comments and reminders. These events are available to all users and you can even add attachments! Overdue reminders are easily viewed each day when logging in.

Are there ODP related letters that you are generating manually? An Ad Hoc letter can be created for you to generate as needed – just enter the account number and the letter will pre-fill with the account information in ODP Manager. Once it is generated, it will be tracked and retained within ODP Manager just like your Collection and Custom letters.

Would you like the letter signature and contact information to change based on the account’s assigned branch? ODP Manager can do that for you!

Would you like your ODP letters to show your logos and footers instead of printing on letterhead? Would you like a user’s signature to print on your letters? If you provide your image files or text, they can be included in your ODP Manager letter templates.

Let ODP Manager help your users streamline account notation and letter generation by implementing these suggestions.

Opting in for Overdraft Protection

Banks and Credit Unions have been providing Overdraft Protection programs for many years but 10 years ago all debit card and ATM transactions that created an overdraft had to have consumer consent before the financial institution could pay the debit and charge a fee.

Prior to 2010, paper checks were nearly 50% of all debit transactions a bank would process and today less than 8% of all debits are paper. Consumers paying with a debit card or electronic transaction is a common practice and we are nearing the situation many predicted 30 years ago of a paperless society for banking transactions.

If consumers want to take home their prescriptions or groceries when paying with a debit card when there are insufficient funds in their account, a bank or credit union cannot automatically authorize the transaction. Beginning on July 1, 2010 a financial institution had to obtain opt-in for these transactions pursuant to Regulation E.

A financial institution can obtain opt-in via their website, in person, by mail, or over the phone. It is not required that a financial institution obtain a signature on the prescribed Federal Reserve’s A-9 form, nor do the forms have to be kept for any period of time. If a consumer opts-in, a confirmation of the opt-in must be sent to the consumer.

Opting-in is a great service for those customers who want flexibility in managing their account. Others may not see any benefit to opting-in. But it gives consumers complete choice on how they want their account handled when it comes to paying for things they need when they are short on funds.

Focus on Reg E Opt-in Now More Important Than Ever

It has never been more important to ensure that your financial institution has adequate coverage in regards to account holder Reg E opt-in. Reg E opt-in allows you to authorize ATM withdrawals and everyday debit card purchases, which may overdraw an account holder’s checking account, as long as they have provided their consent for you to do so.

Data recently released by a 2019 Federal Reserve Payments study shows that only 9% of all transactions in 2018 were from checks paid and 16% were via ACH. An overwhelming 42% of transactions were made via debit card. This decline in traditional transaction types, in favor of a debit card, means that it is extremely important to focus on the proper opt-in approach.

According to Part 205 of Electronic Fund Transfers (Regulation E), the financial institution must give “Reasonable opportunity to provide affirmative consent.”

A financial institution provides a consumer with a reasonable opportunity to provide affirmative consent when, among other things, it provides reasonable methods by which the consumer may affirmatively consent. A financial institution provides such reasonable methods, if—

  1. By mail. The institution provides a form for the consumer to fill out and mail to affirmatively consent to the service.
  2. By telephone. The institution provides a readily-available telephone line that consumers may call to provide affirmative consent.
  3. By electronic means. The institution provides an electronic means for the consumer to affirmatively consent. For example, the institution could provide a form that can be accessed and processed at its Web site, where the consumer may click on a checkbox to provide consent and confirm that choice by clicking on a button that affirms the consumer’s consent.
  4. In-person. The institution provides a form for the consumer to complete and present at a branch or office to affirmatively consent to the service.

By arming your team with the most effective procedures, you can be certain to achieve optimum opt-in for your organization. Strunk has a proven track record of achieving maximum results with financial institutions across the country. We help to more effectively reach your goals, all while remaining in compliance with applicable laws and regulations.

 

Does Your Overdraft Payment Program Have Exclusion Creep?

For the past 27 years Strunk has been the leading provider of formal overdraft payment programs to financial institutions across the country. Many of these programs were put in place in the early to mid 2000’s, well before Regulation E changed the overdraft landscape in 2010.

Some financial institutions have let their programs die and others have put them on the back shelf as fee income derived from the service has gone down. Others continue to wonder what they can do to revitalize their 10-20 year old program.

So, what has happened? In virtually all financial institutions, the number of consumers participating in the formal overdraft program has dropped significantly. For one reason or another, the account holder has been taken out of the formal overdraft payment program. Strunk calls this “Exclusion Creep”. Virtually all of our 1,800 clients had 90%+ participation when the program was implemented but many institutions have 65-75% of their accounts in the program today.

Managing this is paramount to providing a good service to all of your customers and to maximizing fee income. Take a look at your consumer checking accounts and see if they have an overdraft limit assigned to the account. If not, re-qualify them and put them back in the program. Consumers want the service and managing the overdraft program like a line of business benefits everyone.

Does your financial institution have Exclusion Creep?

Audits and Exams and ODP, Oh My!

An audit or exam is approaching? Use ODP Manager to help you gather the requested documentation!

Do you need to supply samples of each letter sent using ODP Manager? In Collection Letters and Custom Letters, you can generate a sample PDF of each active letter template.

For the specified review period, do you need to identify accounts with overdraft limits added or removed? Reg E opt ins or opt outs? Letters generated?  In Events, you can search for all events that occur during a specified timeframe. Use filters to narrow your results to a specific event or letter.  Not only can you identify the appropriate accounts, but you can also export the list.

Do you need a convenient summary of all the account’s information contained within ODP Manager? In Account Inquiry, export the Account Profile as a PDF – it’s a convenient way to compile the information for account officers, auditors, or examiners. It includes an overdraft summary, comments, reminders, repayment plans, and an event history. Also, the Events tab allows you to review all the account’s events and regenerate PDFs of any letters mailed to the customer.

For any Overdraft Privilege Program review, ODP Manager makes compiling the requested information easier.

 

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.