Needed: One Crystal Ball
There is almost no area of banking where the future and present responsibilities change as often and as drastically as the front line. Whether the financial institution chooses to call it Customer Service, or Associate, or Contact Officer, or whatever - the employees who hold down those positions of being available to answer questions and service the depositor have ever-changing data to deal with. During the past few years they have had to explain holds on checks due to Reg CC; soothe depositors and account applicants alike by pointing out why we have to accumulate so much personal information due to the Patriot Act; calm down account holders who have overdrawn their account because of Check 21 and then, if it is available, try to explain the workings of the overdraft protection plan. And these are just the most recent problems the government has given us to handle.
Then there are the myths and urban legends you have to deal with when people come in to find out if they're "...really true?" For instance, an organization called Money Management International (MMI) published a list of myths related to personal finance. Some are humorous, some are odd, and some are downright bizarre. For instance, one myth says if a check is written in red ink, it takes longer for our equipment to read, and so holds up the presentation and payment. The fact is, of course, the color of ink has nothing to do with processing time.
Lottery winning - (please send a check to pay the taxes so we can send you your thousands); the plea from the poor widow and her son in Nigeria - (or the banker or the oil executive or whatever) to transfer millions to your account; the Ponzi scheme - (invest $5,000 with us and we'll double your money in six months) all are probably familiar urban legends to you. How many times have you had to say to a depositor, "Don't EVER give out your account number over the phone unless you have initiated the call!"
A myth about the financial industry says if you owe the bank or creditor money, and make a $5 payment, you are no longer considered delinquent. Sorry - not true. Minimum monthly payment is required.
The fairly new Universal Default clause has caused havoc with another myth - that a creditor (such as a credit card company) can't raise the interest rate on your fixed rate loan. The fact is that it is now common for creditors to raise interest rates based on a consumer's creditworthiness - the track record with all creditors being taken into the decision
And if you've been in this business for many years, you've dealt with the story that although someone went on a loan as a co-signer, they never really expected to be held responsible for the loan! MMI says 75% of the time the creditor approaches the cosigner for payment, because that's the easiest and quickest source for repayment.
What's to come? More details of the Patriot Act have been promised to us that may be even more invasive than before. Consumers are now getting free copies of their credit reports and scores and asking information about them that our platform people are asked to explain. Credit card companies are changing their rules on charging interest on purchases, and the backlash is hitting banking branch offices. (If you haven't read the fine print on the new agreement in your last credit card statement, you better do so!) FinCEN, the regulators, and Congress all have ideas about how your job can be best done, and what we will have to add to our responsibilities "...for the good of all..." and we have already been promised new laws, regulations and requirements.
One piece of equipment would be helpful to the compliance officer, the training officer, the branch manager, the customer service representative, and administration. All you need is a crystal ball with all the answers.
If you manage to find one that works, please share.
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 2, 4/05
First published on 04/01/2005