The CompuShare Courtesy Pay Module meets the processing needs of credit unions wishing to offer assistance when a checking account turns negative.

Details

The Courtesy Pay Strategy

• The essence of this strategy is that your credit union automatically extends a non-contractual courtesy line to your member's checking account.
  
  
• This courtesy line is a courtesy line and members do not have to qualify or enroll. It is simply a service for a fee.
  
  
• This module automates how to set up for courtesy pay through the initialization program. Individuals may be selected to not participate and the credit union would simply update their draft account through maintenance.
  
  
• Instead of an NSF, the Courtesy Pay module will automatically cover the difference and post your predefined courtesy pay fee.
  
  
• This will help daily EFT transactions that may cause the account to go negative.
  
  
• Collections notices and reports will assist with keeping track of the funds due.
  
  
• Courtesy Pay employs a balance forward method for delinquency, accumulating all amounts due from first negative date.

Win-Win Proposition

• Historically, credit unions have returned most or all NSF items and still charged members a fee.
  
  
• By the time a member endures the embarrassment of "bouncing" a check, they have a negative feeling about all parties involved.
  
  
• On the other hand, if you pay the balance, your member will thank you for taking care of them when they needed you most. They will gladly pay the same fee you currently charge and understand that you have provided them with a valuable courtesy.
  
  
• The most compelling reason to consider an Overdraft Courtesy Program is the new non-interest income it will generate.
  
  
• The question is where does this increase in fees come from? Members will voluntarily use it more often as an alternative to credit card cash advances, payday loans, and other higher cost funds sources. The strategy truly is a winner for both your members and your credit union.

Interesting Statistics

• 89% of Americans do not reconcile their checkbooks.*
  
  
• 11% of Americans who do reconcile their checkbooks - about 1/2 only do it once a year.*
  
  
• Debit cards have increased errors in checking account balances on the member's personal checkbook records - leading to more overdraft situations.
  
  
• Merchants high check returned fees discourage customers from using checks.

* Paul Gentile article in Credit Union Times - October 2002.

Member Benefits

• Saves members money, time and embarrassment.
  
  
• Members have more satisfaction about how their Credit Union handles their money.

Credit Union Benefits

• Provides Credit Union with better member retention.
• Increase in core deposits.
• Increase in fee income.
• Strengthens relationships with members.

Processes/Reports

• Daily Account Initialization
• Courtesy Pay Line Change Program
• Extract File for Courtesy Pay Providers
  • BANCServices Group
  • Pinnacle Financial Strategies
  • SmartStep Solutions
  • More vendors will be added soon.
  
  
• Courtesy Pay Delinquent Notice Printing
• Courtesy Pay Status Report
• Courtesy Pay Delinquency Report - aging analysis

Program Parameters

• Waiting period from draft start date
• Courtesy Pay line limit
• Courtesy Pay fee amount
• GL definitions for fee
• Line cut-off-date
• Opt-in or opt-out code
• Include line in EFT positive balance files