In a recent Credit Union Journal Opinion Column, Funds Availability Policies: The Good, The Bad and The Ugly, Oak Tree`s CEO talks about how a credit union's members expectations are much different now compared to a decade ago when instant funds were not as common. Here is an excerpt from the article:
"Credit union members’ expectations are different today than they were two decades ago. Online account access was still evolving, and mobile banking apps were clumsy pieces of software capable of performing basic functions at best. Fast-forward to 2019 and these are now considered mainstay items. And consumers? Well, they have new demands. Now that most apps offer mobile deposits, consumers want instant access to “same-day-deposit” funds.
However, what does same-day-deposit really mean? Let’s break it down with a few real life scenarios, as both sides carry risk.
Funds Availability: Offering the Right Perspective
Fortunately, many people understand there are restrictions on funds availability. Just because they make a deposit does not necessarily mean those funds are available for use the same day. However, the good news is that a credit union has discretion. Federal guidelines state when a credit union must release funds. Most have policies which release funds quicker than federal mandates. Even at that though, a credit union can make the decision to make funds available to members earlier. A lot of this depends on the member’s banking history and the type of check involved. Looking at it from a risk perspective sheds light on the issue. Here are some real-life what “same-day deposit” scenarios.
Scenario 1: Your member walks into your credit union with a personal check for $50 from their grandmother. After deposit, those funds may become immediately available for one simple reason: the amount is really low. If this were a third party check in the amount of $500, they might not have access to it until the next day. Yet, a $50 dollar check carries very little risk for your credit union..."
To continue reading, head over to Credit Union Times website HERE.
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