Time to Revitalize your Overdraft Payment Process

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Recently the CFPB backed off guidance for overdraft payment programs and now is the time to consider revitalizing your bank’s overdraft payment services. While the regulators scared off some banks from offering a formal overdraft program, many banks and consumers have benefited from them for over 30 years.

Consumers create overdrafts…banks do not. Banks are faced with decisions each morning to either pay a customer’s non sufficient fund item or return it to the merchant. Providing a consistent method with these decisions eliminates problems and streamlines the process. Strunk’s program covers all aspects of offering a compliant overdraft privilege service to consumers and small businesses.

Beginning in 2010, debit card transactions that would overdraw an account could not be authorized at point of sale unless the consumer “opted in” and “signed-off” for this service. This was a great idea that came from the Federal Reserve. So, how do formal overdraft programs benefit consumers?

  • Allows consumers to decide how they want their bank account handled when it comes to overdrafts
  • Reduces returned check charges from merchants
  • Allows consumers to take home the groceries or prescription drugs when otherwise their debit card transaction would be denied
  • Keeps a bank from discriminating on daily pay and don’t pay decisions
  • Keeps a bank for discriminating on waives and refunds

Contact Strunk at 800-728-3116 or email at info@strunkaccess.com to learn more about revitalizing your overdraft payment process at your bank.

 

Using and Customizing Account Inquiry

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The hosted ODP Manager software allows users to view information about accounts that have been imported into ODP Manager. This information can be viewed as a list of multiple accounts or the account details for a single account can be selected. Account Inquiry is organized to allow users to select which data columns are displayed by choosing a View. Users can also select Groups to display accounts that meet certain criteria, or they can apply individual filters to display only the desired results. Once the list of accounts has been created, the data can be exported to Excel. This information can be used in addition to ODP Manager’s standard reporting and may be an alternative to creating customized reports.

Users are able to view the details in Account Inquiry for a single open or closed account. In order to manage the account or to address inquiries, users can use Account Inquiry to review basic ODP Information, contact details, or event history. If Fresh Start Repayment Plans, Charge-off Items, or Reg E Opt-In or Opt-Out information has been created or attached to the account, they can be accessed at the individual account level. Comments and Reminders can also be viewed. The individual account information can be aggregated and viewed as a PDF as well.

When viewing lists of accounts, institutions have two available options to customize Account Inquiry. The default Group assigned when users click Account Inquiry is Open Accounts. This will display all accounts that were included in the most recent file imported. The amount of time it will take for the results to load and display will vary depending on the number of accounts included. If an institution would prefer a different Group to load initially, Strunk can designate a different default Group. Also, Strunk can update the Account Inquiry behavior so that accounts do not show in the list until additional column filters have been entered. This may be useful for institutions with larger numbers of Open Accounts that are primarily searching for specific account numbers in Account Inquiry most frequently.

If you have any questions about using or customizing Account Inquiry, please contact Strunk Support at support@strunkaccess.com for more details.

Options for ODP Manager Access

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Institutions should regularly review ODP Manager accounts to remove accounts that no longer need access to ODP Manager, whether because their roles have changed, or because they are no longer employees. Also, the existing roles assigned to users can be reviewed to confirm that they are still appropriate. ODP Manager includes four different roles that control access to the different features in the ODP Manager software.

ODP User rights should be assigned to users who will need to access all software features but will not need to make administrative software setup changes. If a user is assigned the ODP Admin role, they will be able to perform all the functions performed by ODP Users, and are also able to add and change users, revert imported files, and make or request software setup updates. For users that do not need to generate letters or import the extract file, ODP Report User rights will allow them to access ODP Manager Reports and Account Inquiry.

If an institution would prefer to separate User Administration from other ODP Admin functions, users can be assigned User Admin rights if they need to add or change ODP Manager users. Users that need to be able to revert imported files or make and request other software setup changes should be assigned ODP Manager rights.

When users no longer need to access ODP Manager, there are two ways for ODP Admins or User Admins to remove access. If the user is no longer employed by the financial institution, the user status can be updated to Former Employee and no rights will need to be removed. If the user is still an employee but no longer needs the ODP Manager access, the assigned ODP Admin, ODP Manager, ODP User, ODP Report User, or User Admin role can be removed.

If you have any questions about User Administration and Roles in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Overdraft Privilege Continues to be an Important product for Consumers

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With the ongoing negative perception and strict regulations surrounding overdraft privilege, financial institutions find it increasingly challenging to offer this service. Most adults in the U.S. consider overdraft privilege a valuable resource at a reasonable price, highlighting the significant disconnect between regulators and public sentiment.

Overdraft privileges help consumers avoid declined transactions, which can lead to late payment fees and non-sufficient funds (NSF) charges. Consumers feel it is essential to have overdraft privileges to ensure that large payments, such as mortgages or rent, are covered and paid on time if these payments overdraft their accounts. Generally, overdraft privilege is more affordable than some short-term credit alternatives, like payday loans. This is why most consumers have not seriously considered giving up their overdraft privilege. While some consumers with a buffer amount in their checking accounts may not need overdraft privilege, for most Americans, it is necessary to prevent essential transactions from being declined.

When surveyed, banks have found that consumers appreciate that banks covered payments that would have otherwise been declined. Consumers have an easier time checking their account balances than ever before. With access to their accounts via websites or mobile apps, many Americans can monitor their account balances to avoid overdrawing their accounts and incurring fees.

For decades, Strunk has supported financial institutions in delivering a convenient overdraft privilege to their clients while enhancing fee income and ensuring full compliance. Our consulting services for overdraft privilege, combined with top-notch software, can help your institution’s program thrive. Given the increasing regulatory scrutiny, our compliance guarantee is becoming even more crucial. As regulators focus on returned checks and re-presentment, our Overdraft Privilege (ODP) program provides excellent service to customers by covering item costs instead of returning them.

Click here for more information or to contact Strunk for a demonstration.

Using ODP Manager to Review Your Overdraft Privilege Program Information

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Strunk’s hosted ODP Manager software is updated daily with information contained in an extract file generated from your core system. After the daily import, users can generate letters, review management reports, and access additional information to effectively manage a compliant ODP program.

Percent of accounts with an assigned overdraft limit and percent of accounts opted in for Regulation E are important metrics to monitor for the success of an ODP Program. This importance is highlighted on the Dashboard which is displayed after each ODP Manager login. Trends in the Percent with Limit and Percent Opt In are shown over several months. Monthly benchmarks for the Percent with Limit and Percent Opt In are compared to other Strunk clients by the 25th, 50th, and 75TH percentiles. Overdraft Fee and Overdraft Limits are also benchmarked against other Strunk client percentiles. The Utilization Analysis report and the Opt-In Impact report allow users to further review the percentages summarized by branch and by deposit product.

On reports that include account-level details, users can apply filters or select groups to further examine data. Once the filters are applied, the filtered results can be exported to PDF or Excel for additional review or discussion. Reports that show account details include Overdraft Aging, New Accounts, ODP Status Tracking, Fresh Start Tracking, and ODP Heavy Users.

In the Account Inquiry area in ODP Manager, users can apply column filters and groups. If users need to create a list of accounts meeting certain criteria, Account Inquiry gives them the flexibility to build the list and export it to Excel. This flexibility allows users to access all the data included and mapped from the daily import file.

ODP Manager also allows users the ability to search for specific events that occur during a date range. This can help users compile a list of letters sent, OD limits assigned or removed, or Reg E opt ins or opt outs.

If you have any questions about ways to view or export the data in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Save Reports Automatically After Each Import

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The hosted ODP Manager software includes a comprehensive suite of standard reports. These reports should be reviewed periodically to assist with Overdraft Privilege program management and maintenance. These reports are updated after the daily extract file is imported into ODP Manager. Reports can be viewed in the browser or can be exported to a PDF or Excel file.

In addition to allowing users to review reports for the last seven as of dates in the browser, ODP Manager also offers a Report Archive feature. This allows past reports to be automatically retained so that they are available for future review, analysis, or comparison as needed.

Institutions can select which reports they would like to archive. After each import succeeds, the selected reports are saved as a PDF and stored within the ODP Manager software. The reports can be retrieved from the Archived Reports section in Reports and are organized by as of date. If users would prefer to download the reports to store on a network drive, the Archive feature can be configured to allow a Download Report Archive link instead.

If you have any questions about setting up or using the Report Archive feature in hosted ODP Manager, please contact Strunk Support at support@strunkaccess.com for more details.

Save Consumer Reg E Opt-In and Opt-Out Documentation

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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.

Streamline Hosted ODP Manager File Import

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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.

Use ODP Manager Data to Generate Letters as Needed

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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.

Today’s Overdraft Environment

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In today’s financial environment, having access to emergency funds is more crucial than ever. Many individuals are struggling to cover everyday expenses, and overdraft privilege can offer reassurance to customers who require fast access to short-term funds. Consumers, especially those who use overdraft services, continue to show a strong understanding of overdrafts and the options available to them. Consumers would much rather have their transactions paid for than returned. In either case, the financial institution will charge a fee. In the last two years, just over half of consumers have needed immediate access to funds to pay their bills. Political leaders tend to believe that overdraft privilege only affects lower-income consumers, but consumers earning between $100,000 and $150,000 also need access to short-term emergency funds. This is not a matter of wealth, but rather of having access to available cash. For consumers with accounts at financial institutions, having access to cash when needed is crucial. The benefit of not paying a fee unless they use the service is the type of access they are looking for.

Half of all account holders will need help with liquidity at some point. Consumers can’t predict when they will need access to emergency funds, but they want to be certain that if a crisis arises, it will not have a long-term effect on them or their credit. More than 60% of overdrafts come from consumers who intend to use the service and appreciate the value it adds to their checking account. Consumers are looking for a solution without a long-term commitment, such as credit card debt or a personal loan, and overdraft privilege provides that to them. Having access to additional funds when a consumer is in need is highly beneficial, and they do not want to experience any reductions in their ability to use the service. Approximately 30% of consumers use overdraft services, indicating a sustained demand for this offering. It is crucial for financial institutions to provide alternatives within their framework, such as Overdraft Privilege, Line of Credit, and a transfer from another account so that consumers can manage their fees and protect their income. Additionally, a repayment program is available to assist consumers who are having difficulty with their budgets, providing them with extra time to repay their overdraft limit. Strunk offers Overdraft Privilege consulting services and the best software to ensure your Overdraft Privilege program is an ongoing success.

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.