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

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

11. Systems: Multiple Analysis Packages

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

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

14. Sweep Services and Balance Management

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

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

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

19. A Case Study… Bank of AmericaCredit UnionDifference 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. Are credit unions EVER going to use deposit account as a loan risk management tool ??? One more point…

21. And that’s the way it is…