Pub. 2 2012-2013 Issue 6

16 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S dures in place to educate them about the importance of returning their account to a positive balance and to advise them on alternative strategies that might be better suited for their needs. This demonstrates your efforts to promote responsible program use. Transaction posting order Posting transactions in a high-to-low sequence is one of the biggest consumer complaints regarding overdraft pro- grams. Contrary to reports by consumer groups and the media, the study did not fi nd that participating institutions intentionally manipulated the transac- tion posting order to increase revenue. That being said, this remains an area of interest to regulators. Banks can avoid customer complaints, negative regulatory action and possible fi nes by maintaining transaction posting procedures that do not increase account holder costs. Program opt-in rates While the study found that opt-in rates for ATM and POS debit card trans- actions vary greatly from institution to institution, particular focus on the word- ing of account holder materials revealed that participants followed regulatory guidelines that require clear, easy-to- understand explanations regarding opt-in and opt-out procedures. Make sure you are providing your customers with the choice to opt in to overdraft services for ATM and debit card transactions and to opt out of the service for check and ACH transactions. Addressing the impact on low- income and young consumers Due to the economic reality that many Americans live from paycheck to pay- check, a majority of the institutions we spoke to agree with the FDIC’s position that most regular overdraft users were disproportionately low and moderate in- come and more likely to be young adults. However, they noted that some middle- and high-income account holders are also regular overdraft users. Regardless of the income level, it is essential to maintain on-going commu- nications with all account holders car- rying negative balances to inform them of the situation and encourage them to make a deposit. It is also important to provide counseling on issues like how to balance a checkbook and establish a budget. As consumers continue to experience dif fi cult economic situations, many rely on their fi nancial institution’s overdraft program to help them pay their bills and avoid the embarrassment of having a check returned or ATM/debit purchase denied. Absent that service, many rely on more costly alternatives – such as pay day loans or increased credit card debt to make ends meet. A roadmap to full compliance As financial institutions anticipate the CFPB’s final overdraft program ruling, there are steps that can be taken now to ensure that your overdraft pro- cesses and procedures are compliant. The key is to provide your customers with a clearly defined overdraft pro- gram that includes: O WN THE REAL ESTATE YOUR BUSINESS ALREADY PAYS FOR CEDCO S MALL B USINESS F INANCE C ORPORATION Colorado's SBA 504 Loan Expert™ 1175 O SAGE S TREET , S UITE 110 D ENVER CO 80204 ÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊ Office Locations — Denver, Grand Junction, Colorado Springs 1 - 8 0 0 - 8 4 3 - 8 8 5 2 www.cedco.org • More stability for your operation • A stronger balance sheet • An asset to sell when you’re ready A S A LEADING SBA 504 LENDER WE MAKE IT EASY FOR YOU • Buy, Build, Remodel or Expand Real Estate • Purchase and install long-lasting equipment • Fast, expert processing - with low loan costs • Refinance LÕȘiÃà real estate œÀÊiµÕˆ«“i˜Ì • 7iʏi˜`ÊÕ«Ê̜Êfxʓˆˆœ˜\ÊLœÀÀœÜÊÕ«Ê̜ÊfÓäʓˆˆœ˜Ê ܅i˜ Vœ“Lˆ˜i`Ê܈̅ÊL>˜ŽÊvˆ˜>˜Vˆ˜} • Interest rate as low as 5.25%, fixed for 20 years • Down payments range from 10% to 20% • Most Small Businesses are Eligible S TREAMLINED P ROCESSING • Front Range and mid-mountains call Sean or Mary Jane 303-893-8989 • Western Colorado call Pat 970-243-1861 CEDCO Small Business Finance Corporation Your Best Source for SBA Real Estate Loans New Easier Qualification Uninterrupted access to money through a monthly SBA-backed bond auction Low fixed-rate financing Low down payments O WNERSHIP M EANS Q PROTECT YOUR BANK – continued