Why JMFA?

DOES YOUR OVERDRAFT SOLUTION PASS THE PANDEMIC STRESS TEST?

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Due to the impact the spread of coronavirus has had on the U.S. economy thus far, unemployment claims have surged well beyond expectations. More than 33 million applications for unemployment benefits have been filed since measures were taken in Mid-March to combat the pandemic,聽according to Department of Labor聽data. This doesn鈥檛 account for individuals who are newly unemployed, haven鈥檛 yet filed for unemployment benefits or who may be impacted before the pandemic subsides.

As restaurants, retail stores, recreational facilities and travel-related businesses remain closed or operate on a limited basis due to the pandemic, many individuals and families continue to struggle with how to pay for rent, groceries, medication, insurance and other necessities. With continued uncertainty in other affected industries, the economic impact on consumers continues to become more widespread.

In such uncertain times, your account holders need reliable programs and services to help them meet their ongoing financial obligations and provide for their families. Unfortunately, overdraft programs that are based solely on analytics and data aren鈥檛 prepared to address the situation many people find themselves in today.

Non-disclosed service parameters lead to confusion and limit financial certainty

Due to unexpected reductions in work hours, furloughs and layoffs, some account holders鈥攎any of whom have never had an interruption in their paychecks鈥攁re experiencing lower than normal, or no regular checking account deposits. An overdraft program with variable limits鈥攖hat change based on a pre-determined algorithm鈥攁utomatically reduces an individual鈥檚 access to overdraft coverage when his or her balance dips below a certain level. Or, the privilege is removed completely, at a time when it is needed most.

Programs based solely on analytics also lack the ability to provide personalized service or consider important aspects of a person鈥檚 overall financial health or extenuating circumstances鈥攕uch as the ability to repay鈥攐r something as financially devastating as the situation so many Americans find themselves in today.

Without knowing what their overdraft limit will be from one day to the next鈥攐r if they will have protection at all, how can consumers feel confident making the necessary purchases they may need to get through the uncertain weeks and months ahead?

Are you providing your account holders with financial peace of mind?

As you consider all the reasonable and prudent steps you can take to assist those who are affected by the coronavirus, consider this:聽Now, more than ever, they may need the option of an overdraft service they can rely on and trust.聽A consumer-focused overdraft strategy provides clear disclosures, ongoing communication and guidance to help individuals solve their financial challenges with features like:

路聽聽聽聽聽聽聽upfront program details;

路聽聽聽聽聽聽聽fully disclosed limits;

路聽聽聽聽聽聽聽reasonable fees;

路聽聽聽聽聽聽聽neutral transaction posting order that does not maximize fees;

路聽聽聽聽聽聽聽on-going communication regarding account status;

路聽聽聽聽聽聽聽access to other services provided to meet individual circumstances; and

路聽聽聽聽聽聽聽tracking that alerts your institution to potential situations where credit counseling may be beneficial.

Address uncertainty with services that provide financial stability

There鈥檚 a lot of speculation in the industry about how the coronavirus pandemic might change the way financial institutions operate going forward. One thing that shouldn鈥檛 change is the ongoing commitment to providing fully disclosed services to help consumers who may be hit with unexpected financial situations or need extra support during these difficult times.

When all is said and done鈥攁nd things return to a more stable situation鈥 will your account holders be able to look back on how your institution鈥檚 overdraft solution provided the support and service they needed? The measures you take today can strengthen the value you provide and give them confidence that you鈥檒l be there should unexpected financial circumstances happen in the future.

ABOUT JMFA
JMFA聽is one of the most trusted names in the industry. Whether it鈥檚 recovering lost revenue, uncovering new savings with vendor contract negotiations, creating more value, serving account holders better or delivering a 100% compliant overdraft service鈥擩MFA can help you deliver measurable results with proven solutions. To learn more, please聽contact your local representative聽or call us at聽800-809-2307.

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