How Strunk clients can properly handle the issue of re-presentment

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Strunk has been closely monitoring and sensitive to the issue of re-presentment of declined transactions for the past several years. Strunk provides clients with suggested language for checking account agreements to include enhanced disclosure regarding an arbitration provision as well as a service policy that includes specific language regarding re-presentment. These documents allow Strunk clients to handle disclosure of this issue, and many others, properly.

The suggested language for checking account agreements includes a section on re-presentment of declined transactions which addresses the points regarding disclosure referenced in the FDIC guidance – this was one of the main reasons for including the arbitration clause. Through the use of these materials Strunk clients are already handling disclosure regarding this issue properly.

In addition to disclosure, the other point that should always be stressed with examiners is that an account holder with Overdraft Privilege will essentially NEVER be charged a re-presentment NSF fee because their item will be paid the first time. The only way an ODP customer could be charged for a represented item is if they have already exceeded their overdraft limit – i.e if they have a limit of $800 and their balance is already negative $800 or more, items will begin to be returned.

Strunk clients that require current copies of the ODP service policy or the language for checking account agreements should contact Strunk support at support@strunkaccess.com or visit the Strunk Access portal. Additionally, Strunk offers periodic reviews of client programs, which would include commentary on each of the suggested potential remedies from the FDIC regarding re-presented items. These reviews also consist of solutions to address compliance and to increase service charge income.

Document Retention in ODP Manager

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As part of the daily use of the hosted ODP Manager software, users may generate or review documents such as letters or reports. ODP Manager includes features that make it easier for these documents to be retained for future reference.

Each time a user generates a letter, a PDF of the letter is saved and linked to the account’s event history. This makes it easy for letters to be retrieved by customer account or by date and letter type.

The ODP Manager solution allows you to export and save your institution’s reports as Excel or PDF files. The most up-to-date information is always viewable under the Reports section. Users are also able to access reports from the most recent seven As of Dates.

If past reports are retained for additional analysis, there is an alternative to manually exporting and saving copies of reports. If requested, Strunk can set up a Report Archive that includes any of the reports available in ODP Manager. The requested reports will be automatically archived after each import.

Once the Report Archive has been created, PDF files are automatically saved within ODP Manager after each import of the daily extract file. Archived reports are organized by As of Date and retrieved from the Archived Reports section. If your institution would rather download the reports from the archive to save to a network drive instead, a Download Archives link can be set up as an alternative.

Let the document retention features in ODP Manager streamline your ODP letters and report retention! Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about using these features.

Monitor Fresh Start Loan Repayment Schedules using ODP Manager

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After the daily import of information in the extract file from your core processor, the Letters, Reports, and Account Inquiry sections of ODP Manager are updated. In addition to this updated information, the hosted software also allows you to add additional information about repayment plans manually to facilitate monitoring of account’s Fresh Start Loan payments.

If you choose to use the Fresh Start Loan repayment plan feature, after completing your Fresh Start Repayment Plan assessment and approval process, you can enter the repayment schedule information directly in ODP Manager. The data in this schedule can be used to fill in your Fresh Start Loan agreement and will make it easier to generate the document to be signed by your customer.

Once the repayment schedule has been created, Strunk’s Reminder feature will create reminders for each payment. Your Strunk software users will be able to monitor each day whether any FSL payments are due and can then check your core system to see if the payments have been made as agreed. After verifying that a payment was received, your users will track the payment date and amount in the ODP Manager software. The repayment schedule is then updated to show the payments made and the outstanding balance on the Fresh Start Loan.

Repayment plans can be viewed not only for each account, but also on a summary list that can be exported to PDF or Excel for reporting purposes. The repayment plan tracking feature in ODP Manager can help your users streamline Repayment Plan Agreement generation, Fresh Start Loan payment tracking, and repayment plan reporting.

Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about using this feature.

Don’t Take Your Eye off of your Overdraft Program

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With all that is going on in our world, it is more important than ever before for the community financial institution to stay focused on the overdraft programs they offer. Account holders that utilize these programs and follow the guidelines properly should not fear that they will lose access to a valuable benefit of their checking account. There are several things that should be considered when administering an overdraft program.

Strunk’s ODP Manager offers helpful information that your organization can use to properly run a successful program. The Status Tracking report has information on the annual dollar amount of overdraft fees charged per active checking account and the annual amount of NSF fees charged per active checking account. Your organization is able to separate out OD fees from NSF fees through the daily file that is uploaded into the software. The program is also able to track waives and refunds so that your organization may track fees charged versus fees received. This would also help to capture the total annual dollar amount consumers receive in overdraft coverage compared to the amount of fees charged.

Strunk Heavy OD Users report will illustrate the prevalence of frequent users of overdraft. The Utilization Analysis and Opt-In Impact reports show the share of active checking accounts that are opted into overdraft programs for ATM and one-time debit transactions and those that have limits on their accounts.

Please contact Strunk at support@strunkaccess.com to see how ODP Manager might assist your organization in running a more effective and efficient overdraft program.

 

Automatic Uploads to ODP Manager

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ODP Manager depends on updated information from an extract file created by your core processor. This daily file is imported and updates the hosted ODP Manager software so that letters can be generated, and reports reviewed. Each user of the software can manually import this extract file by selecting the file to upload and committing the account data. In addition to this option, Strunk also allows institutions to set up an automatic upload process.

If your institution has the core extract file set up to generate automatically, you may be eligible to use the Automatic Upload. In addition to your extract file generating each day automatically to a specific location, there is a one-time setup process. During setup, a client that performs the upload will be installed and the user and file variables specific to your institution will be configured. Then a scheduled task will be created to initiate the import process after the extract file is updated and before your users go to work.

Your users will still retain the ability to manually import the daily data file if the scheduled process does not run as expected. Once the import has completed, the Automatic Upload process will send an email to your users – alerts can be sent to specific individuals or to a specified group email address.

Making this change should make your file import process more efficient. Get ready to benefit from immediate access to the updated ODP Manager information as soon as your users start their day. Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about using this feature.

Overdraft Privilege Provides a Solution for Charging Multiple NSF Fees

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When a merchant transaction is presented for payment from a consumer account and is refused due to the customer’s insufficient funds to cover the transaction, financial institutions typically charge an NSF fee. When a merchant tries to present the same transaction again in order to recover the denied funds, he or she may be charged a re-presentment NSF fee. If a depository institution receives this type of repeated merchant payment transaction more than once, the depository institution may levy multiple NSF fees. If an Automated Clearing House (ACH) or other item is presented for payment and is denied owing to insufficient funds, certain financial institutions will levy an NSF fee for both the original presentment and each subsequent representation.

In recent class action lawsuits against financial institutions, the removal of key clauses pertaining to the assessment of representation fees was considered to be a violation of contract. Some lawsuits have been settled, with customers receiving refunds and legal fees.  Additionally, state, and federal financial regulators are reviewing DDA agreements searching for potential legal, regulatory and UDAP risks. With these potential risks it is important to review your deposit disclosures and contract language to ensure the way NSF fees are charged is being communicated clearly and consistent to what a consumer could reasonably expect.

This is a great time to make sure that you review your accounts and all of your customers/members that are eligible for Overdraft Privilege should be added to the ODP program unless they have opted out of the program.  By doing this it will minimize your risk for NSF fees being represented, because if your customers/members have an Overdraft limit their items will be considered for payment instead of returned.  Paying the item instead of returning it will ensure that the financial institution minimizes its risk for NSF re-presentments because the item is not returned.  Also, overdraft privilege provides a better service to your customers/members because they will not be faced with potential late fees, retailer fees and damage to their credit from returned items.

Accept Electronic Consent to Opt In for Regulation E

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ODP Manager helps you distribute your Consent Form for Overdraft Services to your customers that have not already opted in for Reg E by including the opt in form with Welcome letters, Reinstatement letters, and the Reg E Opt-in Followup letter. This makes it easy for customers that would like to opt in by mail, but there are three other methods for a customer to opt in: in person, by phone, or electronically. The Reg E opt in form will direct your customers to the appropriate mailing address, phone number to call, or to visit a branch, but are you prepared to accept an electronic response?

ODP Manager includes a feature which can assist you in obtaining your customer’s electronic consent to opt in to ODP coverage for ATM and everyday debit card transactions. Strunk can create a Reg E opt in form and Reg E opt out form that mirrors the content in your ODP Manager letters. You would then add links to these forms to your website.

When your customer visits your website and completes either the Consent Form for Overdraft Services or the Consent to Opt-Out, they will receive an email confirmation of their Reg E election. Also, this response will be tracked in ODP Manager and can be emailed to a designated email address at your financial institution.

Your ODP Manager users will review the new responses in ODP Manager, export a list of accounts that need an update to their Reg E election, and perform the appropriate maintenance in your core software – updating the account record to either opt in or opt out the customer’s requested account. By default, the hosted ODP Manager software displays new responses that have not been reviewed and exported. Prior submissions are also retained to allow your users to review previous responses.

If you would like to set up ODP Manager to accept electronic consent to opt in for Overdraft Privilege coverage for ATM and everyday debit card transactions, please contact Strunk Support at support@strunkaccess.com with any questions or to find out more.

The Importance of Employee Training for your Overdraft Program

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Does your front-line staff have a biased opinion regarding overdraft privilege and present it in a negative tone?  Is your front-line staff having a hard time explaining overdraft privilege to your customers/members and not really sure what to say to them? If you haven’t had a chance to listen to your employees’ present overdraft privilege to your customers/members, especially Reg. E, Strunk recommends doing it now.  Your staff should explain overdraft privilege and its options to your customers/members in a clear, consistent, compliant, and impartial way.

Sometimes front-line employees do not understand the true benefits overdraft privilege can provide to the customer/member.  Some employees often have a bad perception of overdraft privilege because they associate it with disgruntled or confused account holders. This misunderstanding is one of the main reasons why overdraft privilege training and education are so important!  It is important to provide your employees with a script on how to present overdraft privilege and the benefits of opting into Reg. E. Employees that have practiced and memorized a customer/member-focused overdraft privilege and Reg. E script, ensure that the approach is compliant, succinct, and easy to grasp.

Using the technique of allowing the customer to choose how the financial institution should manage a transaction that would overdraw the customers/members account before the due date ensures their happiness and loyalty.  Strunk’s Overdraft Privilege training will provide a clear understanding of the overdraft program and provide consistent talking points to your employees.  After overdraft privilege training your employees will be equipped with correct and thorough knowledge regarding your program.  Strunk will ensure your employees are equipped with a non-biased, clear and compliant script that provides account holders accurate information so they can make the best decision possible for their situation.  Overdraft privilege training will increase your employees’ confidence as a result of this approach, which will boost their performance, productivity, and level of service to your customers/members.

 

Following Up with Frequent Overdraft Privilege Users

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Financial institutions are expected to monitor excessive consumer Overdraft Privilege usage to inform customers of additional available options for overdraft protection. These options could be an Overdraft Protection Credit Line or an Overdraft Protection Transfer from another account with the financial institution.

FDIC regulated institutions are expected to give customers who overdraw their accounts on more than six occasions where a fee is charged in a rolling twelve-month period a reasonable opportunity to choose a less costly alternative and decide whether to continue with fee-based overdraft coverage. Strunk also recommends that institutions not regulated by the FDIC also communicate available alternatives to ODP on an annual basis to accounts with insufficient funds items.

ODP Manager can assist with sending letters advising your customers of the alternatives to Overdraft Privilege. If the ODP Manager import file includes data from the core system that indicates when an account has qualified for the letter by exceeding the threshold, the hosted software can automatically show when a letter is due to be sent. If the data is unable to be added to the extract file but qualifying accounts can be identified from an existing core report or other method, a letter can be generated, as needed, as an Ad Hoc letter.

Once the letter is generated, the letter is tracked and retained within the ODP Manager application.

Please contact Strunk Support at support@strunkaccess.com with any questions or to find out more about using ODP Manager’s Excessive Use Notification letter.

ODP Manager Account History

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One major benefit of the hosted ODP Manager software is access to the software’s advanced history tracking. Key account events are tracked in the system and are searchable.

When the daily extract file from the core system is imported into ODP Manager, significant account status changes are tracked. Is the account newly overdrawn or now in good standing? Has an overdraft limit been added to or removed from the account? Has the consumer opted their account in to or out of ATM and everyday debit card transaction coverage according to Regulation E? Has the account been closed? These items are all tracked and retained in each individual account’s history.

When a user generates a collection, custom, or ad hoc letter, not only is the letter type, description, and date recorded, but also a PDF of the letter is saved and linked to the account history and the event history. All letters are stored within the application and can be regenerated at any time.

If a user needs to make further contributions to the account record, a comment or reminder can be created. 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.

Searching for events can be done for an individual account or across a range of dates. Individual account information is easily exported to PDF. Events occurring during a specified timeframe can be filtered and exported to Excel.

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

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.