Virtually every financial institution has a discretionary overdraft process to provide payment of NSF checks. However, this courtesy is often extended to only a limited number of high net-worth account holders. For the majority of account holders who may inadvertently find themselves overdrawn, traditional discretionary consideration for payment may not be available – resulting in the return of their checks unpaid. The embarrassment, humiliation and additional merchant costs that these account holders may experience are often the emotional source of poor customer relations and reputational risk.
Today's low/no interest rates on savings/checking accounts have prompted many financially sound and responsible account holders to purposely limit savings and checking account balances in order to accommodate their choice to invest in other, higher return financial vehicles. Consequently, important account holders may not qualify for traditional overdraft “protection” services such as pre-approved credit lines or sweep accounts.
It is understandable that on occasion, these account holders may write NSF checks due to common account management mistakes such as late deposits, forgotten transactions like ATM/Debit card withdrawals, returned deposits, and reliance on deposits that are treated as not yet available due to the financial institution's policy. Traditional overdraft protection loan products and conventional discretionary overdraft “protection” processes provided by the financial institution may neither coincide with these account holders' needs nor satisfy their definition of good customer service.
This valuable category of account holders may now feel “unprotected,” disenfranchised and dissatisfied – leaving the financial institution vulnerable to:
- Account holder loss to competitive financial institutions
- Loss of account holders to non-depository “fringe providers”
- Difficulties in attracting new accounts
- A reduction in the value of account relationships
- Profit erosion
Strunk & Associates' Overdraft Privilege Service Program
OVERVIEW
Unlike common overdraft protection loan products, the Strunk and Associates discretionary Overdraft Privilege Service Program is offered as a depository fee-based service privilege that is earned and maintained through an account holder's history of responsible account behavior. In practice, it can be thought of as an extension to a financial institution's existing discretionary overdraft practices.
Overdraft Privilege Service is not a committed or guaranteed loan or line of credit. It is not offered as a guaranteed payment but as a favorable consideration for payment. The Strunk overdraft service program uses a deposit-based system, so account holders don't need any additional paperwork to participate. Nor are they charged service fees unless they use the privilege.
Under Overdraft Privilege, if an account holder writes a check, makes an ATM withdrawal or other payment or withdrawal request for more than the funds available in his/her account, the financial institution may consider payment of that transaction. If the overdraft is paid, a one-time overdraft service fee is assessed.
Because there is no need to sign up for Overdraft Privilege, the program's substantial benefits and convenience are extended to a far greater percentage of the financial institution's checking account consumer base – improving account relations and adding strength to the bottom line.
This comprehensive and structured overdraft service represents relief to the previously “unprotected account holder” from what can be a costly and embarrassing NSF experience. It is designed to compliment and enrich the financial institution's account service portfolio and strengthen its ability to attract, retain and grow profitable account relationships.
Clients of Strunk and Associates report that even though their account holders recognize the Overdraft Privilege is not a commitment, or guarantee to pay their overdrafts, the majority much prefer overdraft privilege over the return of their overdrafts unpaid. Their account holders consider payment of their checks or honoring of their withdrawal requests at ATMs to be far more important than the fees charged for the service.
OPERATIONAL PACKAGE
Turnkey System
From a financial foundation formed in 1976, Strunk & Associates has built an unparalleled record of success with its discretionary Overdraft Privilege Service Program. Years of experience with our overdraft privilege product allows us to offer the ODP industry's most comprehensive ease-of-entry operational package available.
The Strunk operational package includes processes and business support mechanism that are configured to meet your financial institution's needs and requirements for successful implementation, integration and control of all overdraft/NSF account transactions.
With the installation of Strunk's overdraft service program, our team of full-time engagement managers and support specialists provide you with a complete turnkey overdraft/NSF business system that includes:
- Program documentation and implementation plan
- On-site training for entire employee staff
- System automation and system testing
- Regulatory compliance and best practice procedures
- Effective consumer education program and sample marketing materials
- Collection and risk management processes
- Post implementation support
As our support team guides you every step of the way, you'll quickly discover the Strunk & Associates' Overdraft Privilege Service Program to be simple, logical, and easy to execute.
