Robust Technology is the Key to Maintaining a Compliant Overdraft Program

from John M. Floyd & Associates

As regulators put the finishing touches on rules affecting overdraft programs, credit unions are looking for assurances that their existing program will pass examiner scrutiny, while continuing to provide a much-needed boost to their bottom line and a valuable service to their members.

While many in-house overdraft programs are moderately successful, they are often based on limited compliance knowledge and rely heavily on manual account oversight and personal account holder interaction. However, in today’s rapidly changing technology environment, having robust software that provides more efficient program management can give you a much greater return in increased revenue, regulatory compliance and human resource utilization.

John M. Floyd & Associates’ Privilege Manager CRM® software was developed based on more than 30 years of experience helping financial institutions develop high performing overdraft programs. It is designed to:

  • Automate account monitoring, allowing staff to focus more time on member services;
  • Manage risk for all negative balance accounts, not just those in your overdraft program;
  • Reduce risk associated with charge offs;
  • Monitor accounts and alert you to excessive overdraft activity;
  • Streamline the collection process;
  • House all policies and procedures electronically, which is helpful during compliance exams; and
  • Support account holder communication and automatically generate overdraft notifications.

These benefits, along with a compliance guarantee and a proven track record of providing a substantial boost to your non-interest income can make a tremendous difference in your performance and your members’ financial well-being.

In a recent survey gauging consumer reaction to Regulation E’s opt-in requirement for overdraft coverage, 75 percent of respondents indicated they had signed up for overdraft protection for their accounts. If your credit union is committed to balancing regulatory requirements with your ability to provide a service that members clearly appreciate, you must be able to navigate the new rules effectively. And if you’re not sure about your current overdraft program’s ability to positively impact your bottom line, it’s time to change your strategy.

Posted in Compliance.