Have you reviewed your disclosures yet? Or will you be refunding fees to your members?

ATTENTION ONLINE AND SELF-PROCESSING CREDIT UNION CEOs

As promised, this is a follow-up to the “Are Your ACH Procedures Letting Double Fees Slip Through the Cracks?” email you received on Monday, April 29.  (Read that announcement again.)

To give you an idea of the scope for your particular credit union, we have created some reports showing members who were charged both an NSF fee and a separate ANR fee on the same ACH debit item, going back to the length of time your data is currently stored online (12 months for most CUs; may be longer if your credit union pays for additional online retention, or shorter if your CU recently converted to CU*BASE).

To view your report, access your credit union’s HOLDxx output queue and locate a report with User Data LSTACHANR:

Here is a sample of the data on the report:

This data is as of month-end April. (That means if an ACH item posted NSF on the 30th but wasn’t re-posted until the 1st, it would not appear on this report.) 

IMPORTANT: Keep in mind our report cannot evaluate any subsequent account adjustments your employees posted to refund or change fee amounts. If you have any questions on how the data was compiled for these reports, view the following AnswerBook item: https://kb.cuanswers.com/cuanswers/int/kbdetail.aspx?kbid=4512

What about looking even further back?

To help you in your decision-making, we have decided to look even further back in time than just what you store online, and make that data also available to all our online credit unions.  At this point we are restoring data from backup tapes going back to 2014.  Since this restore process requires time, these reports will be made available to you later in the month.  We’ll notify you when those reports are ready for your review.

What’s next?

Now it’s time for you to make some decisions:

  1. Do your disclosures already cover the situation described where a member might be subject to both an NSF fee as well as a separate non-return (courtesy pay) service fee?  (Remember that these are separate fees, one for the NSF and a separate one for the service you provide in not returning the item to the original merchant.)  If so, you likely have nothing else you need to do.
  2. If your disclosures don’t specifically cover this eventuality, do your disclosures need an update?  Or do your ACH processing procedures need to be changed?  This could mean deciding no longer to re-post NSF items, or to start manually refunding individual NSF fees each day before doing any re-post which would result in ANR fees also being charged.
  3. Once you’ve decided on a change to either your procedures or your disclosures, now you must decide what, if anything, to do about fees charged in the past.  Should the ANR fees be refunded, in cases where there were two fees on the same item? Your decision will depend on a number of factors:
    • The number of accounts affected.
    • Whether or not you already manually refunded fees to those members. (Remember our reports have no way of knowing whether you subsequently posted a manual refund to any of those fees.)
    • The length of time you wish to include in your evaluation and potential refund.

4. If you decide you would like to wear a white hat and refund ANR fees, you need to decide:

    • How far back should your cutoff be?  For example, since most CU policies include a 60-day cutoff for reporting errors, you could elect to post refunds only for ANR fees assessed in the past couple of months. Or you could elect to go all the way back to 2014, or any cutoff point in between.
    • Do you want to manually review each account and post refunds only where a refund wasn’t already done manually?  If so, keep in mind this will require manual work by your teams; we cannot automate this for you.
    • Do you want just to post a blanket refund to all accounts?  Once you’ve picked your cutoff date we can assist by adding up all of the ANR fees posted during your selected period and posting a single one-time credit to each member’s account for the total amount.
    • What do you want to do about closed memberships?  Keep in mind that refunds to closed memberships must be handled manually by your credit union; we cannot automate this for you.

NOTE: To learn more about how the refund routines will work, view this AnswerBook item:
https://kb.cuanswers.com/cuanswers/int/kbdetail.aspx?kbid=4514

Consider carefully all of the nuances of this and how your credit union wants to respond, then reach out to us for whatever help you need.  To allow us to organize any requests, we ask that you contact Client Services in the usual way so that any questions you have can be escalated to an expert as needed.

To allow us to track what every credit union is doing, we ask that you please let us know your decision by Friday, May 10, even if you don’t need us to do anything for you.  Send your response or any inquiries to the AnswerBook.