1. Trends in Business Deposits
Larry Middleman
CUBG National Conference
August 22, 2012

2. PayPal Makes Play for More Mobile, POS Transactions
“What’s in a name? At San Jose, Calif. Headquartered PayPal, potentially a lot. That’s because the payments innovator has now dropped “website” from its U.S. product names as it rolls out a suite of tools said to be aimed at helping small businesses collect money.”
Online payments
In-person, offline payments – ability to accept credit cards, PayPal, and checks in person using your smartphone, and a free thumb-sized credit card reader and app
Mobile payments
Invoicing
Debit cards
CU Times, 4/6/12

4. Deposit Services and Fee Income

5. Deposits? Who Wants Deposits??
The goal of most credit unions in today’s market is increased fee income, not increased deposits

6. What Credit Unions are Doing in Business Deposits…
Some are doing nothing
Few are starting out with a simple program
Many are ramping it up past the basics
A small number are doing the whole thing well

7. How to REALLY Get it Done
Two tiered basic business checking account
Account analysis
Remote deposit capture
ACH origination for business
Business online banking
Sweep and balance management

8. Account
Analysis

9. Account Analysis Defined
Account Analysis is an informational tool used to determine the balance levels needed by a commercial business in order to offset fees for services provided by the credit union. The business member’s account balances are used to compensate for the service charges associated with the account(s) activity.

10. Standard Charges for Account Analysis
Account maintenance
ACH – monthly maintenance
Cash deposit
ACH debits
Checks deposited – on us
ACH credits
Checks deposited – transit
RDC – monthly maintenance
Checks paid
RDC – per item
Image clearings – on us
Wire transfers
Image clearings – transit
Other fees can be added at the credit union’s discretion
Cash
Coin

11. Systems: Multiple Analysis Packages
Example taken from ComCore Vol. 5: Administrative Options, Page 58

12. Systems: Account Rollup
Consolidated Account Analysis
Operating Account 1
Operating Account 2
Payroll
Expense Account

13. Systems: Analyzed Money Market
Consolidated Account Analysis
Operating Account 1
Operating Account 2
Payroll
Expense Account
Money Market

14. Sweep Services and Balance Management

15. Sweep: Target Balance Excess Funds Deficit of Funds 1 2 1 2
Operating account
Line of credit
Money market account 1 2
Deficit of Funds
Operating account
Line of credit
Money market account
Reg D 1 2

16. Low Balance Transfer Linear Funding
Linear funding allows the peg balance to be funded via a series of individual transfers from multiple accounts.
A fee can be set for each transfer if desired

17. High Balance Transfer
High Balance Transfers allow the member to transfer excess funds to payoff loan balances or to an income account.

18. So who wants to make money on business deposits?????

19. A Case Study… Bank of America Credit Union Difference
Lower Service Charges
$630
$319
$311
Higher Earnings on Available Balance
$97
$125
$28
Total Monthly Benefit
$339
Annual Benefit of Banking with CU
$4,068

20. One more point…
Are credit unions EVER going to use deposit account as a loan risk management tool ???

21. And that’s the way it is…