Who: Headquartered in Richfield, Minn., Richfield-Bloomington Credit Union (RBCU) serves members throughout the communities of Richfield, Bloomington, Edina, Fort Snelling and the area surrounding the Minneapolis-St. Paul International Airport.
Rick Rasmusson, vice president of Finance for RBCU.
What: RBCU leveraged logicpath’s Deposit Reclassification retail sweep program to maintain compliance with Regulation D and provide its members with greater account flexibility by eliminating monthly transfer limits.
While Richfield-Bloomington Credit Union (RBCU) had an established compliance program in place, one of the credit union’s quarterly reviews revealed that RBCU was deficient on its Regulation D monitoring. Regulation D requires that a financial institution’s savings accounts are limited to no more than six transfers per month. If a credit union or bank allows members to exceed these limitations, then regulators have the authority to issue fines.
“Not only were we putting our institution at risk, but failure to comply with Regulation D requirements would have a negative impact on our member service efforts,” said Rick Rasmusson, vice president of Finance for RBCU. “We were in need of a solution that would help us comply with Regulation D and mitigate our members’ concerns regarding potential penalties.”
Some of RBCU’s executives were already familiar with logicpath’s Deposit Reclassification retail sweep program, a Federal Reserve Board acknowledged practice that reclassifies a financial institution’s transaction accounts as savings deposits for reserve requirement calculation under Regulation D. RBCU internally transformed the account structure of savings deposits to transactional deposits to alleviate the need to monitor six transfers per month.
Enforcing Regulation D was no longer applicable, as was penalty fees for violators. However, with the transformation of the accounts to transactional came the increase in reserve requirements at the local Federal Reserve Bank, thus the need to implement a retail sweep program. Deposit Reclassification establishes two legally separate sub-accounts for each transaction account – a checking sub-account and savings sub-account. The funds routinely needed to cover activity are allocated to the checking sub-account, and the remaining funds are maintained in the savings sub-account. Deposit Reclassification maximizes the portion that is allocated to the savings sub-account, which is exempt from reserve requirement calculation.
“Having utilized logicpath’s Deposit Reclassification tool earlier in my career, I immediately knew that this was the right solution to address our compliance and member service concerns,” said Rasmusson. “These sub-accounts are completely invisible to our members and do not adversely affect their account in any way.”
logicpath representatives were actively engaged throughout the entire implementation and provided RBCU with a disclosure to mail to its members regarding the account changes. logicpath also created a “cheat sheet” for RBCU’s call center and frontline staff to help address any member inquiries or concerns that resulted from the disclosure.
“logicpath provided us all of the internal and external communication documents that we needed and prepared us to answer any questions coming back from our members and staff regarding the rollout,” said Rasmusson. “Since the initial rollout, we have not received any questions from our staff or our membership, which is exactly what we wanted.”
Now, RBCU’s members have greater account flexibility and no longer face penalties for exceeding the six transfers per month limit. logicpath also helped RBCU successfully navigate its first FR2900 filing, as well as the credit union’s first quarterly NCUA 5300 report filing post implementation.
“logicpath was always quick to answer any questions that we had, which resulted in a seamless implementation process that provided the utmost benefit to our members. After the disclosures, the process was a non-event and little to no time commitment.” said Rasmusson. “The Deposit Reclassification process was carried out entirely behind the scenes, so there was no negative impact on our membership.”
Founded by teachers in 1957, Richfield-Bloomington Credit Union (RBCU) offers a wide variety of financial services to members within the communities of Richfield, Bloomington, Edina, Fort Snelling and the Minneapolis-St. Paul International Airport. RBCU helps their members improve the quality of their lives by educating members to make informed decisions, providing the best personal and remote access service and giving back to strengthen their communities. For more information, visit www.rbcu.org.
Atlanta, Ga.-based logicpath provides software solutions and analytics to financial institutions and retail organizations. logicpath proudly services the needs of more than 1,500 clients in 50 states and Canada by providing “Smart Solutions that Make Dollars and Sense.” logicpath is the designer of C3 Financial, a web-based cash forecasting and management software. logicpath also pioneered Deposit Reclassification, a retail sweep program designed to eliminate reserve balances. logicpath's pALMs is a web-based asset/liability management simulation software that provides accurate and detailed analysis asset-by-asset and liability-by-liability. These solutions improve earnings, efficiencies, risk management and operations.