Has the landscape of overdraft payment services changed? You bet! The accelerated growth in the use of "non-traditional" ODP services by consumers is well documented. It should come as no surprise to anyone in the financial community that the overwhelming acceptance and demand by consumers for these "non-traditional" discretionary overdraft payment services over the last decade would lead some regulators and consumer advocates to believe that the potential for abuse could occur/increase without additional regulatory control.

Without question, the regulatory dynamics affecting overdraft payment and other financial services has gradually changed from a relatively informal and self-regulating environment to one where regulatory compliance standards are changing rapidly and enforcement penalties are increasing dramatically.

The Joint Guidance for Overdraft Protection Programs and the Final Amendments to Regulation DD are two recent examples of the changing and more rigid character of actions taken by regulatory agencies. As a result, many banks and credit unions are confused about how to adapt to this ever-changing regulatory environment.

Addressing the New ODP Regulatory Environment

Adapting to the new ODP regulatory environment will require that financial institutions be prepared to commit to an investment in legal, compliance and operational improvement initiatives to meet current requirements as well as set a solid platform to address future compliance requirements – a situation not dissimilar to investments required to satisfy compliance requirements for other financial service products they offer consumers.

Self Examination

We encourage each and every financial institution that offers, or is considering offering, a discretionary overdraft payment service, to closely reexamine and evaluate their programs, policies and resources to determine if required changes are best handled internally, through the use of third party providers, or a combination of both.

Third Party Providers – Seek Genuine Expertise!

We recommend that institutions that are considering use of any outside third party to provide or assist in preparation of compliance initiatives – undertake a complete and prudent due diligence investigation.

Your due diligence effort should be designed to determine if the outside third party has the resources and regulatory expertise to ensure their service program meets or exceeds the regulatory guidelines and directives within the Joint Guidance for Overdraft Protection and Amendments to Regulation DD. Third party providers should also be willing to provide evidence to verify that they are continuing to reinvest in regulatory and program support mechanisms that ensure their ability to provide up-to-date and compliant service programs.

Strunk Credentials:

Strunk & Associates recognized shifts in regulatory dynamics early in the development of its Overdraft Privilege Service. We quickly responded by implementing an ongoing best-in-class verifiable investment in compliance and legal expertise with nationally recognized law firms to augment our vast knowledge of industry practices and operational resources. To this day, we remain unmatched in our ongoing real investments in, and commitments to, compliance and matters involving legal due diligence.

We proactively formed and continue to maintain alliances with major data processing companies, equipment providers and experts in related fields to ensure our Overdraft Privilege Service Program will exceed your changing requirements as well as provide support for the broader issues of risk management, business continuity, integrity and the delivery of a sustained and superior level of customer/member service.

Strunk and Associates has a long standing commitment to continue to support our clients’ needs long after our engagement contracts are signed. Our Client Support Department is managed by senior level executives and its sole purpose is to react to the needs of our clients and to take a pro-active role in keeping them up-to-date on important changes to the program and the marketplace. Obviously, regulatory compliance is an important support function of the department. Our client support personnel routinely make available information on compliance updates, best practices, regulatory changes and consumer issues.

Our ability to recognize and address the dynamics of regulatory forces and provide reliably compliant, prudent, safe, flexible and responsible solutions is an important Strunk core competency. More importantly, it provides a strategic set of assets for financial institutions that verifiably differentiates Strunk & Associates from other overdraft payment service providers.

I encourage you to discover why Strunk & Associates is considered the foremost resource for programs that strengthen compliance efforts and enhance the features and functionality of new or existing discretionary overdraft payment services.