Pub. 5 2015-2016 Issue 5

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S March • April 2016 11 Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933, visit compliancealliance.com , or email info@compliancealliance.com . Enhanced scrutiny currently placed on overdraft has not been limited to the CFPB’s agenda, as the Department of Education recently announced new regulations banning overdraft fees on student debit and prepaid cards. Additionally, several class action lawsuits have been initiated against large banks in the last few years regarding overdraft practices. Most recently, Wells Fargo lost its fight in a federal appeals court to set aside class certifi- cation of three lawsuits in which the bank has been accused of collecting millions of dollars in improper overdraft fees from consumers. HSBC also reached a preliminary settlement for $30 million late last year in a lawsuit before the New York Supreme Court for allegedly reordering transactions to boost overdraft income, while also defending against a class action suit federal court based on similar allegations. Although income from overdraft fees has declined since opt-in requirements went into effect in 2010, it continues to be a significant source of non-interest income. At the three largest banks alone, overdraft income amounted to nearly $1.1 billion in the first quarter of 2015. During the same period, the roughly 600 banks required to report overdraft fees reported approxi- mately $2.5 billion in overdraft fee income. Currently, overdraft charges average $33.07, exhibiting an increase of nearly 10% over the last five years. At this time, it’s too early to tell what, how and to what extent the new rules may impact overdraft programs. Until then, it would be prudent to evaluate the level of overdraft income at your institution, and preliminarily consider the possible impact that reduced overdraft income would have on earnings, budgeting, and strategic planning. A former federal and state banking regulator, Nathan brings unique knowledge and diverse experience to Compliance Alli- ance. Prior to attending law school, Nathan obtained his B.B.A. and served as an OCC Examiner in the New York metro area. While at the OCC, he served as a portfolio manager and the analyst to the resident EIC of a mid-size national bank, a rare opportunity for a junior examiner. After obtaining his J.D. from The University of Texas at Austin in 2011, Nathan worked at the Texas Department of Savings & Mortgage Lending where he served as an Associate General Counsel, developed and im- plemented the Department’s successful and innovative compli- ance examination program with the FDIC, and gained valuable experience participating in FDIC compliance examinations.  SECRET IS OUT! Today’s banks are searching everywhere for a technology partner that does business the same way they do—a commitment to innovation and a focus on service . Well, look no further than CSI. Our innovative solutions and customer-centric approach are the secret combination you’ve been waiting for. csiweb.com/Secret THE HTTP://WWW.CSIWEB.COM/SECRET?UTM_SOURCE=COBANKER&UTM_MEDIUM=PRINTAD&UTM_CONTENT=1&UTM_CAMPAIGN=FY17_03_CSI_ADCAMPAIGN Nathan McDonald