A variety of issues in routing numbers force ACH deposits onto the exception list and delay payments for members of Our Community Credit Union.
To eliminate a delay in aid from the coronavirus relief bill, Our Community dove into the data to proactively identify routing number errors and tell members how to fix the issues.
It used the same process to track recipients of unemployment benefits and offer them temporary loan relief.
Our Community Credit Union ($420.2M, Shelton, WA) has solved a major problem for many members expecting a check from the federal government as part of the coronavirus relief bill.
Andrew Bertrand, CIO, Our Community Credit Union
The routing numbers on the tax returns for hundreds of members contained errors. Some returns even listed closed accounts. That would pose a problem when the Treasury Department used that information to send relief funds through the ACH network into members’ accounts.
OCCU got ahead of the problem by reaching out to those members with instructions on how to fix the issue. The cooperative also told members receiving unemployment benefits about its loan relief options.
Andrew Bertrand has been with Our Community for 13 years. He started in marketing and business development, then moved into analytics before becoming chief information officer in January 2018. Here, he describes the steps OCCU — an eight-branch cooperative based in the westernmost city on Puget Sound, approximately 80 miles southwest of Seattle — took to go the extra mile for many of its 36,000 members.
How did you decide to track ACH deposits, thereby discovering the issue of incorrect routing numbers?
Andrew Bertrand: When we closed our branches due to the pandemic, we converted teller stations at branches without drive-ups into call center locations. The reduction in lobby traffic freed up staff to reach out to members proactively.
One of our first initiatives was to look at incoming ACH deposits and call members who were going to hit the exception report on new deposits due to incorrect account numbers. We now distribute this list every day, and staffers reach out to members to explain the correct ACH account structure so future deposits will not be returned or hit the exception list.
How did the relief payments play into your decision to take proactive measures?
AB: We knew we were going to have a large influx of cash and wanted to get an idea of just how much. We knew the stimulus routing would be based on 2018 and 2019 tax returns, so the idea was to use those filings to estimate how many members would receive a stimulus via ACH.
Members were already reaching out about when their stimulus would arrive, and that’s when we started discovering some of the routing numbers were incorrect and there was a lot of incorrect formatting.
How did you respond, in a nutshell?
AB: Each day a branch or two volunteered to work the list and contact members to explain what was happening and how the members can update their information on the webpage the IRS has set up for current account information.
What software and processes did you use? How long did it take?
AB: It took about a day to create the query, scripting, and calculations.
We created a live connection between our DB2 database and our core processing system, so we had immediate information whenever we received an ACH file. We established this connection with Tableau Server and created a dashboard with filters and visualizations. We created a custom calculation that looked for correct patterns and flagged the accounts that did not follow the pattern.
Can you provide a bit more detail on what you found?
AB: Incorrect account formats were the biggest issue. For example, one member put “OCCU(Account#)” as the format. Others used their debit card number, which would cause an exception. We had to educate members about using savings or checking account numbers.
We also had just completed a core conversion, which wiped out the exception list the old core had compiled to use after an incorrect format had been used.
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How many incorrect routing numbers did you see? And where are you now?
AB: Before we reached out, about 10% of those ACH transactions were excepting or would have. On April 15, we had 7% excepted out. That difference represents about 600 members. Now, we’re down to a handful a day, and we’ve continued this process with all our regular ACHs.
Tell us more about April 15.
AB: On a normal day, our call center receives around 600 calls. On April 15, we received 1,297 calls asking, “Where is it?” That volume would have been higher, but we put pending transactions into our digital banking so members whose ACH was warehoused would see their checks were coming that day.
We also had 75% of our digital banking users log in that day, which put a strain on our digital banking servers and our vendor had to add capacity.
How many stimulus checks have come into OCCU and for what total amount?
AB: Tracking the ACH, we had over 11,000 deposits for more than $18 million, including more than $11 million on April 15 alone. We also processed more than 2,000 checks through remote deposit, which we identified as possible stimulus checks because of the deposit amounts.
How did you contact the members? What did you tell them? Were they happy to hear from you?
AB: By telephone. We informed them of the correct ACH format and let them know how to fix it with the IRS. We also started doing this with daily exceptions to limit our own workload and to ensure correct ACHs in the future. The members were thankful, happy, and surprised that we would reach out first.
What else are you doing with that ACH information?
AB: We looked at incoming unemployment benefit payments and reached out to those members to explain our loan modification options.
Payment skips soared then settled in April as Our Community reached out to help a surge of members with sudden financial issues.
We also did email campaigns highlighting the options for loan deferments, skips, and our new emergency loan. All the messaging keeps with the “We’re all in this together” vibe.
So far, we’ve provided $1.28 million in deferrals and extensions on 102 loans, which is less than 1% of our portfolio. We’ve also provided 664 total skips, representing about $250,000 in payments on $10.4 million in loans, which is a little over 7% of those eligible loans.
What best practices or lessons learned about this effort can you share with other credit unions?
AB: Be proactive and reach out to your members first. Also, find ways to increase efficiencies and reduce workload for your staff. And, this time of crisis is the right time to show members the credit union difference and continue that personal touch. Especially with members no longer receiving that service in-branch.
This interview has been edited and condensed.
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