RED FLAG Deviation Exceptions & Credit Card Act Implications

RED FLAG Deviation Exceptions

As you may recall, over the weekend of June 13, 2009, we installed an update to give you more specific control over which member activity exceptions you want to track. At that time, each of the thirteen categories had their own percentage parameters. Setting the percentage value to 9999 told the system to ignore this category. For example, this would allow you to only track exceptions for ACH In and ACH Out by setting all the other categories to 9999 and placing a reasonable deviation percentage for the ACH In and ACH Out parameters. The update set all the categories to 9999; therefore, you had to activate the specific categories that you want to track.

Since the June 13, 2009 update, several credit unions that are using these features have made some additional suggestions regarding check withdrawals (checks issued). Based on these suggestions, during the weekend of July 18, 2009, we will install an update that adds the option of screening loan checks, certificate checks, and IRA checks. These options are at the Back Office > Standard > Parameters > Control-Master parameters in the Estimated Activity Section.

The update will set these options to cleared (unchecked) which means that all loan, IRA, and certificate checks are screened. If you want to exclude any of these check categories (loans, certificates, IRAs) from the estimated calculations, then select (check) any or all of the check boxes for these items. This will not change existing exceptions, but it will prevent some future false exceptions caused by loan checks, and so forth.

The update also changes the Loan Indicator option on the Check Out screen in Multiple Transactions to a drop-down list that includes IRAs and certificates with loans as options. This helps you differentiate which kind of transaction the check supports to facilitate the screening changes.

We also researched the ability to give some real-time alerts to the tellers when excessive use exceptions occur.

Credit Card Act Implications

Several credit unions have contacted CBS about the implications for credit unions with the Credit Card Act, and one forwarded a copy of the letter from Jeff Bloch and Kathy Thompson with CUNA dated July 1, 2009 to CBS.

NOTE: Please remember that most of the agencies do not send copies of the documents that they send to you to core processors; therefore, please forward a copy to CBS of anything that you think we need to know to handle your processing. We would rather get 100 copies of the same information than miss getting something critical.

Some credit unions have contacted CBS concerning monthly loan statements and the ability to comply with the twenty-one day notification requirement. The CAMS-ii system can produce a monthly statement for the open-end loans as it currently does for share drafts, personal service loans, and any account that has a Regulation E requirement. We would, however, need to create a process to automatically mark all the open-end loans for monthly statements before the month-end statement processing and add the loan next payment due date to the statement. It appears that this would need to be in place by the end of August.

We are currently waiting and listening, as are credit unions, to any final ruling on changes. As we get more information on this topic and any changes to statement processing that may result, we will post them to the CBS Message Center to inform all credit unions.

NOTE: If the Credit Card Act causes the production of any additional statements, using CAMS-ii electronic delivery would be a way to reduce the costs associated with printing and mailing statements.