Whoknew

Fed Reserve logo on bill

Don’t Call It a Rewrite – The Ease of Volcker Rule is for Efficiency Sakes

On May 30, 2018, the Federal Reserve proposed rules to simplify compliance requirements relating to the "Volcker rule," which was established after the global financial crisis of 2008, and prevented taxpayer-insured banks from engaging in risky proprietary trading, and from owning or controlling hedge funds or private equity funds. The Fed’s proposed changes do not go against the rule’s core principles of prohibiting banking entities from making risky financial bets, but aim to ease the nightmar...

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Topics: Federal Reserve, In the News

Don't Forget

Don’t Forget Your People!

Bank and credit union customers, young and old, like the option of walking into a branch and being greeted by a familiar face. It’s no surprise then that profitable branches recognize the value of branch staff and work hard to keep them from leaving the branch. On the flip side, management that ignore or overlook their branch employees will face above-average employee turnover, low branch morale, low customer satisfaction with the branch experience and lost business. So, don’t forget your people...

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Topics: Customer Service, Customer Facing Banking

Top 5 hand

Top 5 Mistakes of Branch Transformation

Faced with changing customer preferences, especially from millennials and Generation-Xers who make up America’s largest demographic, banks and credit unions are keen to transform their branches from traditional to newer models that incorporate the delicate balance between high tech and high touch (see 100% Branchless Banking – Myth or Reality?). But successful branch transformations aren’t easily accomplished. Here’s why:

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Topics: Branch Transformation

Man chasing flying money

The Fear of “Running Out of Cash” is an Illusion

Every responsible branch manager strives to satisfy his/her customers’ banking needs, especially when it comes to their demands for cash. Not being able to fulfill a customer’s request for cash at a bank or credit union branch is probably every head teller’s nightmare! Every banker wants to have more-than-adequate cash, and is pretty fearful of running out of cash (total cash holdings at the branch; not to be confused with cash flow at the branch). This fear, however, is an illusion that leads t...

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Topics: Cash Usage, Cash Balance

Stress Test and Money

What is the Fed Doing to Ease the Stress of Stress Testing?

On April 10, 2018, the Federal Reserve Board sought comment on a proposal to simplify capital rules for banks while preserving strong capital levels to maintain their ability to lend under stressful conditions. The proposal would reduce the amount of Tier-1 capital that large, medium and small-sized banks would need to hold as a buffer against future economic shocks – based on size, complexity, and systemic footprint of each firm. This should help small and mid-sized financial institutions and n...

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Topics: Financial stress testing

Dodd_Frank sign

Are We There Yet?? A Dodd-Frank Deregulation Update

On March 14, 2018, the Senate passed a bipartisan measure to exempt dozens of small community and regional banks and credit unions from the Dodd-Frank Wall Street reform law enacted in 2010. The bill, which recognizes that smaller financial institutions are disproportionately burdened by regulatory demands, now moves to the House of Representatives, where it faces a tougher approval battle because conservatives believe the Senate version doesn’t go far enough in dismantling Dodd-Frank.

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Topics: Dodd Frank

cash being swept

When Should I Implement Deposit Reclassification?

  Deposit Reclassification, commonly called a retail sweep program, helps banks and credit unions reduce and even eliminate reserve balances; allowing them to deploy the freed-up funds for profitable lending and investment purposes. A bank or credit union’s motivation to implement deposit reclassification depends on costs versus benefits. Implementing Deposit Reclassification makes sense at all times, but is even more important when interest rates are rising and expected to continue to rise, whe...

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Topics: Deposit Reclassification, Federal Reserve Balance

balance scale apples and oranges

Deposit Reclassification vs. other Retail Sweep Programs

 A Comparison of Deposit Reclassification and the core providers’ Retail Sweep Programs Deposit Reclassification, commonly referred to as retail sweep programs, help banks and credit unions recover their Federal Reserve balances due to reserve requirements and quickly improve profitability. These programs reduce reserve requirements to the point where in most cases, they can be met with vault cash alone, without parking funds at the Fed. Financial Institutions can then invest these freed-up fund...

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Topics: Deposit Reclassification, retail sweep program

Warning poor cash management process

5 Warning Signs of Poor Cash Management 

Most retail operations and branch managers at banks and credit unions believe that they are doing a good job of managing cash. While they may admit to some room for improvement (nobody’s perfect, right?!), many don’t believe that tweaking their cash management practices would significantly improve the branch’s operations or profitability. As a result, many branches operate under the myth that they are doing a good job of managing cash. However, here are five warning signs that might reveal poor ...

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Topics: Cash Management

money mistakes-eraser

3 Cash Management Mistakes That You Don’t Know You’re Making

According to the Federal Reserve Bank of San Francisco, cash is still the most frequently used retail payment instrument; used in nearly one-third of all transactions, even when other options are available. Data also shows that 89 percent of all Americans carry cash to some extent, and nearly two-thirds hold cash every day. As a result, consumers are dependent on banks and credit unions to get the cash they need for everyday spending. However, branches and ATMs do not always meet their demand fo...

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Topics: Cash Management, Cash Usage