"Profitable" MSB Account

We have recently acquired branches in a metro area which had several MSB accounts. In the past, we have only small check cashing companies. I know we will spend more time and effort with these accounts, and the risk is certainly there. Can anyone share with me a service charge routine that has been accepted by examiners and tends to help these accounts become profitable?

Have you put them on analysis?

We have them on our regular analysis -- but because of the extra monitoring and extra cash they are using, we are trying to come up with an analysis just for this type account.

I have seen fees range from a couple hundred dollars to over $4,000 per month. Sadly, I don't know the formula these banks used though.

That's what I have heard also -- just trying to find out some of their formulas!

We base the risk on the level of 3rd party checks deposited monthly. Give me your emial address and I will send you what we have.

beverly@cbtx.com

Thanks!!

Be very very careful of discussing specific pricing parameters with other financial institutions as that is generally prohibited.

With respect to the risk of third party checks, many institutions require a pledge of collateral, such as a Time Deposit, to cover the endorsement failure risk. The requirement is that the account must be maintained at least a year to three years after the last 3rd party check is deposited.

With respect to a monthly service fee, you really need to take a look at the expense the bank will incur for the additional monitoring, due diligence work, etc. and charge accordingly.

This is a public forum Brice. You may want to take down your email and PM it to SQ.