By Richard Miller, Executive Vice President, JMFA
We schedule routine inspections for our cars. We protect our homes against unforeseen events. We visit the doctor and dentist regularly for checkups. And we attend parent-teacher conferences every school year. We all engage in preventive and proactive measures in our personal lives to avoid expenses, worries and problems down the road—so why should you expect to do otherwise when it comes to your overdraft program?
Proactive support from a vendor means ongoing review and reporting from Day 1. For overdraft services, it’s critical you receive this type of preventive support in order to save your credit union from compliance headaches, member confusion and stagnant (or lost) revenue.
The Important Questions to Ask
Is your overdraft partner proactively supporting you, or simply reacting to issues? Ask yourself:
- Am I confident that we are running a 100% compliant overdraft program?
- Am I in frequent communication with our provider?
- When was the last time I met with our provider?
- Am I receiving new program recommendations?
- Can staff communicate confidently with members about our program?
- Am I sure we’re paying a fair rate to our overdraft consultant?
- Are members using the program and understanding its benefits?
- Are we seeing steady revenue from our overdraft program?
- Is the program offering additional value?
If you answered, “No,” to any of the above questions, the root cause may be the lack of a fully disclosed, fully compliant overdraft program—the heart of which is ongoing monitoring and preventive maintenance.
The Essential Benefits of Proactive Service
A proactive overdraft partner isn’t just nice to have—it should be the norm. The benefits you’ll reap from ongoing monitoring and maintenance of your overdraft program are abundant and include:
- Compliance assurance. Never worry about regulatory concerns when your partner offers a 100% written compliance guarantee. Frequent check-ins and pre-emptive guidance from your representative give you the ability to craft compelling communications that meet UDAAP and Regulation E rules and requirements.
- Expert oversight. Monthly reports, quarterly discussions and yearly reviews with your representative keep you abreast of regulatory changes, technological advancements and new things to consider, with expert recommendations to drive your overdraft program forward.
- Training opportunities. Continuous learning is one of the most effective types of preventive maintenance, helping to reinforce best practices and take your program to the next level. A partner that offers a number of training opportunities, from online webinars to on-site and in-person training, clearly has a proactive approach in mind.
- Contingency pricing. An overdraft consulting partner with contingency-based fees means they don’t earn money unless they make you money. With this structure, you’ll always feel you’re paying a fair rate and your representative is sure to be staying on top of your account at all times. This structure shows you are truly in it together.
- Member satisfaction.When an overdraft program takes the initiative to evolve and change to meet the needs of members, they in turn will continue to rely on your service and develop trust in your credit union. This results in increased loyalty and retention.
- Measurable results. Ongoing monitoring lets you capitalize on opportunities as well as adjust to make corrections early. Both of these lead to results you can measure and continuous movement forward.
In short, your overdraft partner must provide you, their client, with an exceptional experience before, during and especially after implementation, so that you may do the same for your members—while simultaneously growing your credit union.