Knowing when it’s time to re-evaluate your products and services isn’t always obvious when leadership and staff become comfortable with legacy offerings, and long-held policies and procedures. But when it is determined there is a better way to provide helpful, valuable services for account holders, truly service-oriented institutions go all in to make the necessary changes.
Established in 1938, Catholic and Community Credit Union – headquartered in Shiloh, IL – provides this level of member-focused service to anyone living in the Illinois counties of St. Clair, Madison and Monroe, as well as St. Louis County across the Mississippi River in Missouri.
NEW VENDOR RELATIONSHIP LEADS TO NEW OVERDRAFT STRATEGY
Prior to 2012, when members overdrew their checking account, the credit union returned the items that caused the overdraft. Accounts with excessive overdraft activity were closed. Then, a representative of John M. Floyd & Associates (JMFA) called on the credit union and presented an alternative strategy. An established overdraft program that would help members avoid paying costly merchant fees on returned items, while providing an additional revenue stream for the credit union. That conversation set the wheels in motion for the implementation of JMFA OVERDRAFT PRIVILEGE®.
After the initial meeting, credit union leadership began to research overdraft programs and providers. The more they learned about JMFA, the more convinced they became that JMFA OVERDRAFT PRIVILEGE® had “the best strategy in the market from a compliance and income-producing standpoint,” according to Jim Pickus, Catholic and Community Credit Union chief financial officer.
ROBUST TRAINING OPPORTUNITIES INCREASE EMPLOYEE CONFIDENCE AND PROGRAM RESULTS
Once the decision was made to sign a contract with JMFA, credit union leadership realized the need to change the mindset within the institution regarding its new approach for handling member overdrafts. “Up until this point, employees considered the idea of bouncing checks to be a bad thing,” Pickus said. “So, we wanted to help them understand how an overdraft program would benefit an individual or family when they were facing a financial emergency.”
Prior to the program implementation, JMFA’s consultants brought all staff members on-board through comprehensive, on-site training. “By the time JMFA OVERDRAFT PRIVILEGE® was up and running, we had experienced an institution-wide shift in philosophy regarding overdrafts,” Pickus explained. “Everyone was supportive of handling overdrafts differently. Everyone knew how our program worked and how to explain it effectively to members. Most importantly, employees no longer believed that people who occasionally bounced a check were ‘bad people’.”
Since then, as new employees have been hired, the credit union has made sure they receive the training, so they have a thorough understanding of the program, along with the ability to help members understand how to use it appropriately.
Another training resource JMFA provides its clients is the opportunity to attend The JMFA Academy in Houston. “The Academy was very helpful for our program administrator,” Pickus continued. “This two-day, offsite experience helped him gain a better understanding of one aspect of our program that needed improving. He learned how to address the issue effectively to ensure better results going forward.”
Pickus also appreciates the monthly emails he receives from the credit union’s relationship manager – as well as the on-going performance advice and consultation calls to address any area of the program that might get off track. “When charge offs were starting to increase, our consultant gave us ideas on how to avoid a hit to the bottom line,” he said.
WHEN IT ALL COMES TOGETHER, IT’S WORTH REPEATING
Since the initial implementation of JMFA OVERDRAFT PRIVILEGE®, Catholic and Community Credit Union has renewed its contract with JMFA twice. Financially, the program has resulted in a 70 percent increase in non-interest income over base. Even with fees that are lower than those of its peer group, the credit union is earning substantially more revenue. “No doubt, without the program we would be earning much less,” said Pickus.
Additional resources provided by JMFA have increased the program’s value in other important areas as well, including:
- The compliance expertise and guidance mean one less thing for employees to worry about when there are so many other challenges and business issues to address every day.
- The program analytics and reporting capabilities in Privilege Manager CRM® and FastTrack help Pickus and other staff members keep track of the program’s usage and progress.
- On-going consultant recommendations have helped to increase extended overdraft coverage opt ins on ATM and debit card transactions, and curbed unauthorized usage by members.
- A customized consulting approach ensures recommendations are consistent with the institution’s service philosophy.
Over the years, implementing JMFA OVERDRAFT PRIVILEGE® has made a big difference for the credit union and its members, according to Pickus. “Our folks have the confidence they need to explain the program to members,” he said. “As a result, the reception has been very positive. Members have come to understand the importance of using the privilege wisely to maintain it. Once they understand that, they don’t want it taken away.”
THE RIGHT COMBINATION UNLOCKS UNLIMITED POTENTIAL
“Since we didn’t have an overdraft program before the initial meeting in 2012, we were basically starting from scratch,” said Pickus. “JMFA brought the right combination of overdraft knowledge, compliance expertise and program recommendations to make the everyday management a smooth process for everyone. They came in and set up the program, and we have been doing it their way ever since.
“I would recommend JMFA to any institution that doesn’t have an established program or that needs to clean up a stale one. JMFA OVERDRAFT PRIVILEGE® monitors and pinpoints any issues that need to be addressed to make it work. We obviously have seen value in those aspects of the program throughout two program contract extensions.”