Vendor Debuts Solution To Handle Non-Member Checks

CU*Answers has developed a software product that its leaders say will give credit unions a running start toward capturing new members from consumers who use a credit union to cash a check.

The new teller platform product is an addition to its flagship software product, CU*Base, and includes non-member teller services as a standard feature. It is one of two recent releases by the CUSO formerly known as WESCO. The second product, added as a standard feature of its back-office platform, supports courtesy pay and non-return checking programs.

"We have attacked the Internet market space, we have home banking with three-million hits a month, check free models for bill pay and we sell both online and in-house services," said CEO Randy Karnes. "We're very much a solutions provider and a future provider."

The Next Logical Opportunity

Karnes said non-member services, namely check cashing, seemed the next logical offering considering the boom in community charters and the fact that credit unions have traditionally been dealing with non-members via secondary relationships.

He said CU*Answers is presently meeting with CUs to discuss their business plans and suggest they take a close look at independent or co-sponsored check-cashing facilities.

"Credit unions are both motivated by income needs and philosophically aligned with servicing these consumers with fair service fees," Karnes said. "We hope by positioning credit unions with these integrated tools, we can give CU*Base credit unions one step up on those using third-party tools that do not leverage current facilities or employees."

He said he would like to see CUs provide comfortable, welcoming environment for non-members, then work to make them members. "We want to encourage those people to come in and do business" despite the use of risky lures such as check cashing.

With the teller platform software, non-members who don't qualify or have no interest in joining the credit union can still come in for check cashing, miscellaneous receipts and credit card advances, he said. The software includes special fee configuration options along with a new flag on non-member records that identity a non-member who qualifies for these services.

The non-member software separates non-member records from member records just as it does for members of other CUS that use its shared branching services, Karnes said.

"A lot of data processors get caught up in that trap where they are always behind the business plan," he said. "They enter, then build the tools. We build the tools so we're prepared to enter into the plan."

The second software product features the ability to individually and batch manage members relationships for negative balance clearing levels, member notices, collections and negative account balance tracking and revenue collection.

Building A Philosophy

Similar to the existing non-return or "force pay" feature available in share draft exception processing, Auto Non-Returns allow the CU to configure a program where member balances can automatically be processed to a negative amount, with corresponding fees.

"This allows the credit union to build a philosophy around its back-office capabilities and not a consultant's plans," he said.

Karnes said the process only applies to share drafts, but expects ACH and debit card processing to be added in the future.

Karnes said CU*Answers previewed plans to interface these new checking account features with its CRM Tiered Service package, which scores members monthly for over 30 categories and hundreds of relationship factors.

"No matter what marketing plan, internal or external, these tools are about better management of member checking accounts, increasing net revenue, and building stronger relationships with members," said CU*Answers EVP Jim Vilker. "CU*Answers credit unions now have the ability to work with checking account consultants or create their own products."

The flagship product, CU*Base, was developed in 1994 and 1995 with Vilker as its team leader. Since then, it has tripled in size, has sold out every year for the last five years and is already being ordered for 2004.

"We are very, very fortunate," Karnes said, explaining that while CU*Answers is a multi-owned CUSO, it is still relatively small with only 53 owners-each of whom has only one vote.

Among The New Features

* A new field called "first date negative" is being added to share and share draft account records. It is updated automatically during daily processing for accounts that have a negative balance and cleared when the account is in the black again.

* A new inquiry added to the work collections feature shows all loans that have been written off. It allows collection officers to monitor and track collections activity related to these special loan accounts.

* A new field is being added to member records for savings, checking, certificate and tax escrow accounts to automatically record the Employee ID of the person who opened the account. Future enhancements include an on-demand summary report and a new graphical inquiry that will prove a fun way to boost cross sales efforts.

* Non-member transactions will be coded and recorded separate from member accounts. A flag will appear on their computerized record that identifies them as non-members who qualify for the service.

* The software includes a combined overdraft protection fee that will be assessed only if funds are transferred from both a share- type and a loan-type account to cover checks.

* For CUs that charge a deposit item fee, a new configuration option will ensure the fee is being charged as it should be. This was created as a back up to human inputting errors.

* Three additional miscellaneous cash fields have been added to the cash inventory section for the separation of sales of such things as stamps and movie tickets.