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Use the right overdraft provider to do the right thing

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first_img 12SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Jeff Harper Jeffrey Harper brings more than 25 years of industry experience to his position as president of ​BSG Financial Group. ​ where he heads up the Sales and Marketing divisions of the … Web: www.bsgfinancial.com Details I think we can agree that there are consumers who need short-term liquidity options. Among several recent studies, the Brookings Institution reveals that one-third of American households live paycheck to paycheck; and American Banker data cites that 54% of checking account customers are in poor financial health.Financial institutions can provide a valued service by offering a compliant overdraft privilege program to help these individuals manage unexpected, ill-timed expenses. In fact, a recent study by Novantas said that 66% of overdrafts occur when consumers knew they have a low balance, but want the payment to go through anyway.So how does your credit union offer a cost-effective service without encouraging reckless behavior? A good place to start is to review how your third-party overdraft vendor is compensated, which can affect the way the program is viewed by regulators and how it is executed vis-a-vis account holders.In a webinar called “Avoiding ‘OOPS!’ in Your Overdraft Protection Program,” Patti J. Blenden, CRCM, CPA, President, Financial Solutions for Growing Companies, Inc., warned that the practice by some third-party overdraft providers of pricing their overdraft programs based on a percentage of the increase in income the bank will generate is generally inconsistent with promoting the responsible use of these programs. You may have heard of this type of incentive compensation referred to as a “pay for performance,” which essentially rewards the provider with a percentage of the additional fee income generated by the program.Unfortunately, many third-party providers today still price their programs based on this form of incentive compensation. However, when compliance examiners evaluate whether the third-party relationship raises the potential for compliance, operational, financial and reputational risks to the financial institution, they may look harshly on such an arrangement.A third-party provider in this type of an arrangement may encourage practices that boost revenue in the short term, but are detrimental to the customer and the bank in the long run. The preferred pricing methodology is to establish a fixed price for the service that is not tied to program performance.Ms. Blenden made it very clear that neither an institution’s third-party vendor nor its own internal infrastructure should incent the fee income that can be generated by the overdraft service. She drew a comparison to the loan originator compensation that led to mortgage reform restrictions: “If we give people the incentive to make more money, they are going to come up with creative ways to do so and they may not be in the bank’s long-term best interest.”She suggested that institutions not only look at their third-party overdraft arrangement and eliminate incentive compensation, but also at their own institution: Do you incent employees to get more people involved in the program? These activities can be an indicator to a regulator or to an independent reviewer that your institution is focusing on incentivizing employees or the third-party vendor at the expense of the consumer… exactly what you do not want.Ms. Blenden’s final word on the topic (and we couldn’t agree more): “Make sure you’re using the right people to do the right thing.”last_img read more

The Uberized credit union

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first_img 68SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,Bradley Blue No matter what Brad were to say about himself in this bio, it would be easy to find the truth about him with a simple google search. This applies to … Details So many recent articles have talked about our need to “Uberize” credit unions. But how?How can we disrupt an industry that has traditionally had little competition by facilitating mutually beneficial exchanges between people with existing assets and people who need them?(Pauses for dramatic effect.)(Waits for the stragglers to catch on.)Credit unions were disruptive long before Uber was a sparkle in Garrett Camp’s eye. In fact, this chart in Google’s NGram viewer makes it seem as if the term “disruptors” was invented just for us.Beginning in 1934, when the government finally allowed credit unions to compete with banks, it took credit unions just over 30 years to reach 50 million members. In today’s world this may seem slow, but consider it took the telephone 75 years to reach 50 million users, just over 50 years to reach 50 million US air travelers, and about 40 years to reach 50 million US car owners. For a modern reference, Uber has yet to eclipse even 10 million users worldwide in its 7 years of existence.(Graph courtesy of Credit Union Resouces Inc.)Credit unions were once the disrupter to banks what Uber is now to taxis, but our collective hustle to “Uberize” banking shows how far removed our industry is from those grassroots beginnings. In so many ways, we have become just another taxi brand waiting in line at the airport with the other assorted national and community brands, waiting for our turn to be called forward, and watching Simple, Venmo, Ally, Square, Lending Club, Credit Karma etc. bypass the line repeatedly to pick up fares.The best way for credit unions to “Uberize” is to stop looking like the rest of the cabs. When is the last time someone passed on a taxi for a different brand of taxi? It happens all the time with Uber because the company is remarkably different in convenience and cost. In the same way, credit unions must present a remarkably different value proposition to bypass the line of banks. And while we may not be able to become more convenient than these newcomers due to the costs and risks inherent in doing so, we already offer better rates, and we’ve got a value proposition in our cooperative structure which cannot be emulated by competitors.A differentiated credit union industry pays dividends, emphasizes member participation in annual meetings and other activities, provides personalized service, and participates meaningfully in the communities it serves. It delivers better rates, charges fewer fees, and conducts business in transparency. Most importantly, a differentiated credit union industry highlights member ownership as the primary point of differentiation.When we repeatedly hear the myth that “nobody cares about the credit union difference,” it’s tempting to believe it and start to look for success in faster delivery channels, sexier apps, etc. And while emulating the quick growth of Uber by developing technology is enticing, we shouldn’t ignore the successful strategies used by one of the most powerfully disruptive movements in history: our own.last_img read more

SCBL and Chaparral Basketball Tournament brackets released

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first_imgby Tracy McCue, Sumner Newscow — Mid-season High School basketball tournaments will kick into full gear starting Saturday for the South-Central Border League and the Chaparral Tournament involving Wellington, Belle Plaine and Conway Springs.The brackets for both tournaments were released today. The SCBL Tournament is here. and the Chaparral Tournament is here. Close Forgot password? Please put in your email: Send me my password! Close message Login This blog post All blog posts Subscribe to this blog post’s comments through… RSS Feed Subscribe via email Subscribe Subscribe to this blog’s comments through… RSS Feed Subscribe via email Subscribe Follow the discussion Comments Logging you in… Close Login to IntenseDebate Or create an account Username or Email: Password: Forgot login? Cancel Login Close WordPress.com Username or Email: Password: Lost your password? Cancel Login Dashboard | Edit profile | Logout Logged in as Admin Options Disable comments for this page Save Settings You are about to flag this comment as being inappropriate. Please explain why you are flagging this comment in the text box below and submit your report. The blog admin will be notified. Thank you for your input. There are no comments posted yet. Be the first one! Post a new comment Enter text right here! Comment as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Submit Comment Subscribe to None Replies All new comments Comments by IntenseDebate Enter text right here! Reply as a Guest, or login: Login to IntenseDebate Login to WordPress.com Login to Twitter Go back Tweet this comment Connected as (Logout) Email (optional) Not displayed publicly. Name Email Website (optional) Displayed next to your comments. Not displayed publicly. If you have a website, link to it here. Posting anonymously. Tweet this comment Cancel Submit Comment Subscribe to None Replies All new commentslast_img read more

Mission (not) accomplished

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first_img160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Now the president is asking for patience for this one last attempt to leave in an orderly way. Any connection between the events of Sept. 11, 2001, and Iraq – always tenuous at best – has been lost, and the pattern of lies, mistakes and miscalculations has forced Bush to replace his entire war team from Defense Secretary Donald Rumsfeld on down. The failure to secure the capital city sums up the entire war in Iraq. After four years, the United States has failed to achieve even that, and now Iraqis themselves often look back to the tyranny of Saddam Hussein as a better time than today. It’s quite clear to the president and to the American people that there’s an end in sight to the war. There has to be. It can’t go on. And very likely it’s an end that no one is going to feel very proud of. Probably the best that can be hoped for is to secure Baghdad and broker some sort of end to the civil war and violence – surge or no surge in U.S. troop levels. Bush has one last chance to eke out any victory in Iraq. But he should realize the clock is ticking. There’s only so much patience that the country has left. ON the fourth anniversary of the Iraq war, President George W. Bush finally conceded, albeit obliquely, that the original goal of ushering a Western-style democracy into Iraq was no longer achievable. “At this point in the war, our most important mission is helping the Iraqis secure their capital,” he said in a gloomy speech Monday when he asked Americans to give him some more time to do this one thing before giving up on the chaotic country altogether. The speech was a recognition that the Bush administration’s goals and mission have changed from complete victory to merely finding a way to get out without being accused of cutting and running. It was also a recognition that support for the war is waning sharply among Americans who are tired of the years of fighting that have accomplished nothing quantifiable other than casualty figures and civil war. last_img read more