Five Ways to Spruce Up your Overdraft Program in 2019
A CUNA Strategic Services Partner

I know we are already closing out the second week of the year, but we can still say Happy New Year, right? As you move forward with your plans and activities for 2019, I wanted to let you know that we are committed more than ever to developing relationships that assist in your efforts to provide great products and services to your members and your employees. Please reach out to me with any questions you may have regarding products and services you are interested in, or if there is something you are looking for to help meet the financial needs of your members and organization.


We kick off the year of “Member Solutions” with an article from JMFA, one of our CUNA Strategic Services partners. Today’s article has some great tips on overdraft programs and services, a point of emphasis on the NCUA’s list of supervisory priorities this year. We hope you will consider JMFA as you strive to not only meet, but exceed, your goals. Thanks for all you do for the credit union movement, and thank you for your support.




George McDonald, Chief Officer of Strategic Services.




With 2019 upon us, it’s a great time to press “reset.” Here are a few New Year’s resolutions to keep you on the right path with overdraft services.


RESOLUTION #1: “I will put my account holders first with a fully disclosed overdraft program.”

An undisclosed overdraft service is no service at all to account holders. Without a clear explanation upon opt in and without disclosing overdraft limits and/or fees, your overdraft program has the potential to leave account holders confused and dismayed. 


On the flip side, a fully disclosed overdraft program lays it all out in the open, offering transparency and empowering your account holders to make informed decisions.


RESOLUTION #2: “I will help my staff by implementing a program that’s simple to explain to account holders.”

According to a recent global survey, the top factor influencing employee wellbeing is stress (95% of respondents). An overdraft program shrouded in mystery—a confusing opt in or dynamic limits based on hard-to-explain algorithms—makes for stressful conversations between your employees and account holders. 


As the face of your institution, your employees deserve better. An overdraft program that offers set limits and transparency is easy to understand and easy to explain. 


RESOLUTION #3: “I will maintain 100% compliance.”

If your overdraft program doesn’t come with a 100% compliance guarantee and offer ongoing monitoring, your bank or credit union is open to compliance violations that could be very costly. This summer, TCF Bank was ordered to pay $30 million for how it handled its overdraft services. You can’t afford to ignore this resolution.


RESOLUTION #4: “I will keep charge-offs down.”

Overdraft programs that rely on heavy use from a small group of individuals run the risk of having high charge-off rates. Not to mention no room to grow. 


However, when your program becomes a fully disclosed service to be used as a safety net by a larger pool of account holders, you not only mitigate the risk of charge-offs—you also have better chances of increasing non-interest income.


RESOLUTION #5: “I will put an emphasis on continuing education.”

The industry evolves, regulations change, employees come and go—so it’s incredibly important to establish a culture of training and continuing education for your overdraft program. Staying on top of compliance issues, following best practices and learning about analytics and reporting capabilities are essential to the success of your overdraft program.


To stick to all five of these resolutions in 2019 and beyond, check out JMFA OVERDRAFT PRIVILEGE®—a fully disclosed, transparent program that guarantees 100% compliance, can help boost fee income and offers continuing education opportunities exclusively for clients through the JMFA Academy. It only takes a few minutes to begin your free analysis. Why not get the year off to a positive start?

Today’s article was written by Richard Miller, Executive Vice President of JMFA. For the past 38 years JMFA has been considered one of the most trusted names in the industry helping community banks and credit unions improve their performance and profitability. That is why they are a CUNA Strategic Services (CSS) partner.


If you are interested in learning more about JMFA, please contact Jenny Jackson, CUNA Strategic Services alliance manager or George McDonald, CUAD’s Chief Officer of Strategic Services. For information or questions about any of our DLSC products or services please contact George.


<< Go to Memo List