As stated, the OCC and FDIC have actually prefaced their proposed tips of deposit advance items on soundness and safety issues. Nonetheless, there was small proof to offer the premise why these items pose any security and soundness dangers towards the banking institutions that provide them. You will need to note some banking institutions have actually provided deposit advance services and products for several years with little to no or no soundness and safety issues, therefore we are unsure regarding the foundation for the Agencies’ concerns over institutional safety and soundness. Close examination that is regulatory of services and products has yielded fairly very good results and, notably, demonstrated that close working relationships between banking institutions and regulators may result in the introduction of wise and reasonable products. Furthermore, as discussed below, bank-offered deposit advance services and products include materially less danger of problems for customers than similar services and products provided by non-depository providers.

Reputational Danger

There is certainly small proof customer dissatisfaction with bank-offered deposit advance services and products. To your contrary, customer satisfaction with your items can be quite high with below normal issue prices. As an example, in one single bank’s survey that is recent of advance clients, 90 % of participants ranked their overall experience with the merchandise as “good” or “excellent”. The customer satisfaction rating ranked higher for the bank’s deposit advance product than any other product offered by that bank in another survey by a different bank. Continue reading →