800-809-2307
Four Letters. Infinite Potential.
Making Ends Meet in the Dog Days of Summer

Making Ends Meet in the Dog Days of Summer

Summer is winding down and kids are heading back to school. Across the U.S., some 29 million households are expected to spend $27.6 billion on supplies and clothing, plus the extra —and often unexpected — activity fees and ancillary costs that come with a new school year. This, along with the fast-approaching holiday season, means cash-strapped families could be in for a bumpy ride ahead should they have a miscalculation.

According to a survey by Lending Tree, while consumers are generally optimistic about their financial prospects this year, unexpected expenses and making ends meet are the top money concerns in 2018.

When consumers find themselves in unexpected financial situations or lack the necessary funds to make it until payday, the Dealing with Unexpected Expenses section of the Federal Reserve’s  2017-2018 Report on Economic Well-Being of U.S. Households identifies that four in 10 adults would either carry a balance on a credit card (43 percent), borrow from a friend or family member (26 percent), or sell something (19 percent).

But, where do consumers turn when assistance from family and friends isn’t available; they don’t qualify for a credit card; or have maxed out their credit limit? What if the need is an emergency or they want to avoid the possibility of having a transaction denied all together?

What’s the solution to this challenge?

Match product choices to account holder needs

Technology-driven applications have created expectations for fast, convenient solutions to consumer financial needs. For instance, the use of algorithms and big data simplify the processes that determine creditworthiness for short-term, small-dollar lending programs. But are impersonal solutions where an outside service provider is making the choice of whether the service is provided the most responsive way to address all account holders’ emergency needs?

Earlier this year, the Office of the Comptroller of the Currency (OCC) issued a bulletin establishing core lending principles, policies and practices for short-term, small dollar loans for the large institutions it oversees. However, neither the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) nor the National Credit Union Association (CUNA) have released guidance on policies and procedures, or granted approval to move ahead with such products for smaller banks and credit unions.

Without clear, consistent guidance or approval from industry regulatory bodies, the possibility of enforcement action or negative comments from regulators on lending practices is concerning. What’s more, the possibility of additional interest rate increases this year by the Federal Reserve could impact the cost for consumers and — in turn — the viability of such programs.

Even if regulators move to address these concerns, short-term, small dollar loans don’t adequately address the needs of consumers with low or no credit scores who are looking for short-term liquidity. Plus, approval requirements impede immediate access to funds.

Transparent, consumer-focused service yields more balanced results

On the other hand, a fully disclosed overdraft program provides all eligible account holders with the ability to cover their transactions to an established limit with their full knowledge of how the service works and how much it costs. Additional benefits include:

 

For Account Holders

For Your Institution

Pre-approved for immediate access brings

financial peace of mind when unexpected expenses arise

Compliance peace of mind regarding existing regulations and consumer protection expectations

 

No lengthy credit approval process

Opportunity for on-going communication with account holders about account status and additional services that are available to help them maintain a healthy account

 

No fee if the service isn’t used

Comprehensive employee training on program processes and procedures strengthens account holder relationships

While the next few months could present additional financial challenges for your account holders, maintaining good financial health is a struggle for many consumers throughout the year. In fact, about one in five Americans (19 percent) are living paycheck to paycheck.

How a bank or credit union addresses the needs of its account holders tells a lot about the focus it places on providing exceptional service experiences. A disclosed overdraft program can relieve the stress caused by financial shortfalls — whether they are caused by an error in balancing a checkbook, an emergency situation or an unexpected expense.

If your account holders don’t use the service, they won’t ever be charged a fee. But, more importantly, in the event they do need it; it’s there. That’s the kind of reassurance that will reduce the stress of unexpected financial situations throughout the year and strengthen account holder relationships for years to come.

 



 

ABOUT JOHN M. FLOYD & ASSOCIATES (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. Whether it’s recovering lost revenue, uncovering savings opportunities, serving your account holders better, finding the perfect personnel fit or delivering a 100% compliant overdraft program, JMFA has the right solutions to help you not only meet, but exceed, your goals. We are proud to be a preferred provider among many industry groups. To learn more contact your local representative or call (800) 809-2307.

 

100% 12 months 14 years 20 years 2020 2020 vision 40 years abusive abusiveness Academy account holder account holder retention account holder strategies account holder strategies; growth strategies; account holders accountability Achieve achievements Advancements Advice Agreement agreements alerts Americans analysis analytic Analytics announcement ask the expert Assistance ATMs Attendees attorneys attracting talent auto loans Automation B2B Balance Bank Bank of Pacific Banking banking services banks banks and credit unions batching Benefit best practices board governance board member board of directors Bob Layendecker bottom line branch equipment branch profitability brand loyalty branding Bryan Hanks budget budgets bundling business business culture business environment business practices business processes business strategies calendar card processing cardholders career advice Career Goal CARES Act caring case studies Case Study cash CDC CEO CEO onboarding certainty CFPB Challenges change charitable Checklist Cher Cheryl Lawson Choose Chris Karstens civil litigation claim clarity class action class-action lawsuit Classroom clients Cloud Cohron collections CommFirst Federal Credit Union commitment committed Communication communications communities community community banks Community Outreach Referral Program Competition Competitive Complaint Compliance compliance examinations compliance risks compliant condition conduct Conferences confidence connection Consistency Consistent consultant Consultation consultative consulting Consumer Consumer FInancial Protection Bureau consumer protection Consumer-focused Consumers Contactless Contactless cards Contingency Contingency Pricing contingency-based contingency-based fees Contract Contract Analysis Contract Negotiation contract negotiations contract negotiator Contract Optimizer Contract Renegotiations contract review contract staffing Contracts Convenience core processor contracts Cornerstone Credit Union League coronavirus corporate culture corporate governance cost costs Courtesy Pay COVID-19 CPE credits Credit Card credit card contracts credit card processing credit cards credit report Credit Union Credit Union Vendor Management credit unions crisis Crissandra Fry CSS culture customer customer experience customer service customers CUVM cyber security Damian Data Data Analytics database Deal debit debit card contracts debit cards Debt deceptive Decisions Demand Letters Department of Labor Deposit deposits Development Dick Miller digital digital wallet directors Disclosed disclosures discounts Discussion Dodd-Frank Act dollars donation Donna Sumrall Dynamic earnings Economic economic recovery economy Education efficiency studies election Email Emergencies Emergency employed employee employee retention employees EMV migration enchancing productivity enforce enforcement Engagement environment Errors evaluation Evolve examiners executive search Expectations Expense expense management expense reduction expenses Experience Experiences Expert expert negotiations expertise Experts expire Facilitators families family FastTrack FDIC Federal Reserve Federal Reserve Board fee Feedback fees Field Consultant Financial Financial Institution financial institutions financial integrity financial security financial services financial stability Financial Worry FinTech fit Fixed limits Fixed-limit Floyd's Forum Forrester Franklin First Federal Credit Union Free Analysis full disclosure Fully Fully Disclosed fully disclosed overdraft program fund funds future Gen Z Generating Income generating leads generation Generation Z Gift Gil Johnson global Goals governance government government agencies Greenwood Credit Union Grow growth guidance Gym Halloween Hammond Happiness health Heartland Tri-State Bank hiring HKW Holiday Holidays Houston Area Food Bank Houston Livestock Show and Rodeo HR HR policies Hubur human capital human resources Implementation implementing important Improved improved efficiencies improved results Inc. incentives income income enhancement Industry Innovate Innovative in-person Institution interest rates interests internet banking services interview strategies interview tips IT contracts Jackson Jai Jai Darden James Jamone Moore Jan Southern Jennifer Peoples Jennifer Simmons Jessica Pickett Jim Griffis Jimmy Nguyen JMFA JMFA Academy JMFA clients JMFA News JMFA Next Generation Overdraft Privilege JMFA team Joe Marsh John Cohron John M. Floyd John M. Floyd & Associates judicial justification Kelli Silvernale NCUA Kelly Flynn Kennedy knowledge law lawsuits Lawyer leaders leadership Learn Learning Legal legal risk legislative lending program Lesson leverage Limit Limits Literacy litigation litigators lives loans local Long Term Long-Term lost revenue Maggie Thompson Maintenance manage Managed management management experience Mark Roe marketing marketplace Mary Soergel MasterCard matrices Matrix Matrix-based measurable measurable results meeting Member Members mergers Midwest Region Millennial Millennials mindset minimalism minimalist Mississippi Missouri mobile Mobile Banking mobile phone app Model monetary Money Morrison & Foerster Partner mortgages Most Valuable Provider NAFCU NCUA Needs negative balance Negative Settlement Negotiate Negotiating negotiating contracts negotiator Net Operating Analysis New Decade new revenue New Year New Year's Next Generation JMFA Overdraft Privilege NOA Non-Compliant non-disclosed non-interest Non-Interest Income North Carolina NSF NSF fees Obrea Poindexter OCC Officer Oliver Ireland onboarding Online operational Opportunities Opportunity Opt-In organization Organizational Health Outcomes outsourcing Overdraft overdraft compliance overdraft coverage overdraft fees overdraft practices Overdraft Privilege overdraft privilege program overdraft program Overdraft programs overdraft protection programs Overdraft Protection Service overdraft service overdraft services overdraft strategy overdrafts overdrawn Overspending pandemic Part 2 Partner partnership Paul McFarland paycheck emergency payday loans payment cards Payments Penalties Pennsylvania performance personnel physical distancing plan planning Plus4 Credit Union podcast Podcasts policies policies and procedures Policy POS Positive Swipe post-pandemic practice practices Press Release Privilege Manager CRM proactive problem-solving procedure Procedures process process improvement Processing product profitability Productivity Products Professional Profitability Improvement Program Program Management programs prohibited project staffing Promotions Proposals Provider providers PwC Quality quantity Reactive reality Reassess Recruitment Services recruitment strategies reduce expenses refer referral Reg E regional director regulation Regulation E regulations regulators regulatory relationship Relationships reliability remote Renegotiate Renewal Reporting Reputation resolutions Resources Results Retail retail operations Retaining Employees Retention Retirement revenue revenue enhancement review Richard Miller risk risks ROI Ron Jennings Roy Roy Seifert Rules Ryan Armstrong safety Sales Salesforce Satisfaction savings Scrutiny secrets Security senate Senior Relationship Manager service service agreements service contracts service delivery Services Sessions settlement shareholders Sheila Bridges Shopping social distancing Social Events social media socially distanced Software Solution South Carolina specialization speed Spending staff staff development staff spotlight staff training staffing staffing gaps staffing studies staffing study stakeholders standard Statistics stimulus payments Strategic Planning strategic vision Strategies Strategy streamline Stressful study succeed Success success factors successful Succession plan succession planning Support survey Susan Prell system talent team team members technology technology costs technology upgrades technology utilization temporary staff term terms Text Third-Party Expert third-party providers third-party vendor contracts third-party vendors threat three Tim Strandquist Time Tools Tools and Resources Tracking Trainer training transaction transactions Transparency Transparent Travel Treats trend trends Trey Martin Trust turnkey UDAAP uncertain times unemployment unfair updates Upgrades Value Variable Variable Limits Vendor vendor agreements vendor contract negotiations vendor contracts vendor management services vendor performance vendors video violation Virginia VISA volunteer Walker Washington Washington D.C. Washington Savings Bank Webinars weeks well-rounded Westmoreland Community FCU Whitney & Company Wish list women work work ethic Workshops YouTube