Expert advice and comprehensive resources alleviate uncertainty
By Mark Roe, Executive Vice President of National Sales | JMFA
Just as the holidays are approaching, price increases on everything from groceries to gift items to gasoline could have a Grinch-like impact on consumers who were already struggling with the ongoing economic impact of COVID-19.
In response, some large financial institutions have caused quite a stir by announcing that they are eliminating overdraft fees. And while this strategy initially sounds positive and makes a splash in the news, the effort fails to address what consumers face when important items aren’t paid, including:
What’s more, while these “no-fee” programs may pay some items, all—including critical family expenses, such as a mortgage or car payment—are at risk of being returned. And, if you take a closer look, some institutions charge low-balance fees if an account is not returned to positive within a certain number of days. Others will only not charge a fee up to a certain dollar amount. In other words, the consequences of these alternative strategies can result in higher costs and inconveniences that outweigh the impact of a reasonable overdraft fee and cause additional stress for consumers.
Let’s face it, when your account holders experience an unexpected expense that depletes their account balance, knowing their transactions will be paid is greatly appreciated. Plus, when all the details about how the service works are provided upfront, including the fees, it builds trust in your institution. The best approach is a fully disclosed and responsible overdraft solution. By providing your account holders a safety net they can rely on should they need it, you’ll eliminate uncertainty and give them financial peace of mind.
A responsible service is the best strategy
Evaluating your overdraft strategy to ensure it is a responsible service that benefits your account holders and your financial institution without the right resources is challenging. But, having the expertise of program implementation consultants working alongside your staff is the best way to achieve a customized solution, based on your goals. On-going advice will help your team gain insight and confidence in the many ways to optimize program results. For example:
Plus, access to valuable tools that help sustain more effective program management, including compliance expertise, offers tremendous value. Moreover, this approach will complement your internal capabilities while providing additional support to surpass your goals.
Consistency has lasting implications
How you choose to approach serving your account holders who come up against liquidity needs says a lot about your overall service strategy. A transparent, equitable and inclusive overdraft option offers value—to both your account holders and your financial institution. It also goes a long way toward building trust and establishing you as a partner in creating financial security for consumers in your market.
Contact us today for more information or to schedule a review of your overdraft strategy.
JMFA is one of the most trusted names in overdraft consulting, focused on communication, transparency and improving client outcomes with a 100% compliant overdraft service. JMFA can help you deliver measurable results with proven solutions. To learn more, please contact your local JMFA representative or call us at (800) 809-2307.