TOPIC: Overdraft

Horizon Pay-to Limit Feature

CFO at a bank ($136MUSA)
I would be interested in learning how other banks are using the automatic overdraft "Pay-to Limit" features in Horizon.  We have fixed amounts set up as OD limits by product, but would like to have something more dynamic. 

    Overdraft sweep path

    AVP at a credit_union ($175MUSA)
    We are looking at turning on the overdraft path sweep with increments of $25.00; meaning it would pull $25.00 to cover overdraft, or if the purchase was $26.00, it would pull $50.00.  Does anyone have any sample notice they would give to the members?  I'm thinking we would put something in our quarterly statement.

      Over drafting set up- Converting from Ultradata to Fiserv DNA

      Manager at a credit_union ($611MUSA)
      We are currently in the process of converting cores from Ultradata to DNA and are hoping for some advice/insight on how to convert certain over drafting options as well as opinions on options being presented to us for over drafting in DNA.

      1. We have some members on our current core that we had set up with product level over drafting sequence. If you experienced this, how did you decide to convert the over drafting for these accounts?

      2.  Did you allow different ownership per suffix under one primary account in FSP – did they only allow over drafting from accounts with the same ownership? If so, how did they handle this when they converted to DNA? Did they have their members sign any form of acknowledgment for this change?

      3. Do they allow checking accounts to be part of over drafting in DNA? If so do they have a lot of members using this? Do they have any feedback about allowing this if they offer it

      Thank you!

        Help Consumers Make Ends Meet During Times of Crisis

        Now, more than ever, your account holders need access to cash at an affordable interest rate. Learn more about our compliant and responsible, small-dollar, short-term loan program and reach out to us to take advantage of our special offer which will allow you to serve consumers who need liquidity during this time of financial unrest. 

          Overdraft Privilege: Available vs General Ledger method regarding one-time debit card and ATM transactions

          Employee at a bank ($326MUSA)
          I read the FDIC's June 2019 Consumer Compliance Supervisory Highlights regarding some banks that have been scrutinized by examiners for overcharging OD fees if they use the available balance method vs the general balance method for authorizing debit card transactions. We use the current ledger balance for posting transactions and the current available balance for authorizing debit card transactions. Per this article we can mitigate our risk by system settings to prevent assessing more OD fees by using the available balance method and clarifying our disclosures. 

          We have validated our system will not charge an OD Fee if the transaction is authorized on good funds, and we feel we have mitigated our risk in this area. We use the model A-9 form for our Reg E opt-in consent form, and previously believed using the model form was sufficient; however, it does not get into the details of when an OD fee could be charged based on available vs ledger balance and neither do our other disclosures. I did find a lawsuit based on the language being too general such as "An overdraft occurs when you do not have enough money...", which comes straight from A-9. I'm hesitant to add to or change model forms, but I'm curious if in this case, it may protect us from additional scrutiny. 

          Would you recommend adding more specific language to our Reg E Opt-in Consent form to clearly describe when OD fees will be charged? Or do you think we've done enough to mitigate our risk by the documentation I have to support that our system is set up to not charge an OD fee when a transaction was authorized with adequate funds and now the account has inadequate funds?  Have any FDIC banks experienced any issues with examiners on this topic? 

            Banks and Credit Unions: Break Down Your Data Silos to Build Up Your Revenue!

            When your account holder data is spread across disparate systems in multiple lines of business, every aspect of your organization’s performance is impeded from acquisition to onboarding to retention – meaning that your institution has likely missed critical service and marketing opportunities in your account holders’ journeys.
            Banks and credit unions that are seeking to become more efficient, productive and agile need to centralize their data into a unified platform.
            Download our free white paper to learn about the many ways you can build up your financial institution’s revenue by breaking down your data silos! 

              5 Things to look for in an Overdraft Service Provider

              Your overdraft service provider can be one of the most important business partners your financial institution employs.

              This document presents critical factors to consider to select an overdraft service provider that can successfully help you:
              • Provide world-class service to your account holders
              • Maximize revenue
              • Manage risk
              • Remain compliant
              Get "5 Things to look for in an Overdraft Service Provider" today!


                Is Your Overdraft Program a Black Box?

                Do you really understand how your overdraft management program calculates overdraft limits? Can you explain the specific factors, trends and overrides that determine the overdraft limit?
                The answers to these, as well as other key questions, shouldn’t be a mystery. Data flows into your system, the data is processed and your system outputs an overdraft limit. But can you describe exactly what happened during that process to your examiners?
                If you can, you’ll be equipped to customize your overdraft program to provide superior service to your account holders! If you can’t, then your overdraft program is a black box. 

                Download our free white paper today! 

                  Why Community Banks Need to Offer Dynamic Overdraft Limits

                  There are many proverbs about the consequences of "standing still" and how the concept connotes inertia, or the lack of progress or growth. One well-known example is attributed to author Timothy Ferris: "Many a false step was made by standing still." While the concept is applicable to many things like major life decisions, risk-taking and business models, it also can be accurately attributed to overdraft limits. Are your limits standing still? In other words, are you offering only static, one-size-fits-all limits? If so, chances are that your overdraft revenue is likewise static.