The Consumer Financial Protection Bureau’s call for comments on overdraft protection practices has reached its end date (June 29) and it is anticipated new rules governing the ordering of debit card transactions within posting programs will be issued.
Over the past year, a number of banks and credit unions have reached legal settlements pertaining to processing practices designed to maximize overdraft fee revenues by the timing in which transactions are presented for posting to an account. Top processors have taken note of these trends and an article from Credit Union Times discusses an email sent to clients of Jack Henry and Associates that run on the Symitar Episys platform. The clients were told:
“Currently, the Episys Draft Posting batch program does not allow the draft items to post in the order they are received,” the email said. Instead, the Episys software draft posting program allows credit unions to select from three processing methods: low to high amount, high to low amount, and draft number order.”
The email goes on to explain how clients can set up the system to be certain that exception items (those that would overdraw an account) are processed after credits are posted, for example. In a true real-time operating environment, none of these issues would matter, since transactions would post as they occur, but realistically, a banking system’s reliance on batch processing isn’t going to change anytime soon.
Click here to read more from Credit Union Times.