Welcome Lanco FCU!

In January, we will welcome LANCO FCU, Lancaster, PA, to the network as an issuer and acquirer. Their members will begin using shared branching on January 1, 2015; and, your members can visit their four offices beginning in early January. You will be notified of the specific date soon. LANCO FCU offices available to service your members for shared branching transactions are:

• 349 West Roseville Road, Lancaster, PA 17601
• 4213 Oregon Pike, Ephrata, PA 17522
• 974 E Main Street, Mount Joy, PA 17552
• 2516 Willow Street Pike, Willow Street, PA 17584
 

For your convenience, below is the updated PaCUSC Contact Listing.

Self-Service Teminals Update

Self-service terminals are growing in all aspects, from grocery stores to the airport, so why should teller transactions be any different.  Credit unions are adding self-service terminals to help members conduct their transactions without having to wait for a live teller.  These machines are appearing in credit union lobbies, and their drive thru lanes, since members can conduct either on-us, shared branching, or ATM transactions.  These NextGen ATMs are helping credit unions and their members make the leap to a new kind of member experience. 

The self-service terminal allows the member to determine the type of transaction they want to perform; which, in turn determines the network the transaction will be routed through.  When the member selects ATM, the transaction will be handled just like any other ATM transaction. It will require an ATM or debit card tied to that account, and will be routed through the ATM network where those fees will apply.  If the member selects Shared Branching at the machine, then the transaction will be routed through the CO-OP Shared Branching network where those fees would apply.  By selecting the Shared Branching option on the machine, the member will not be required to insert their ATM or debit card tied to that account. They can insert any plastic card with a magnetic stripe since the machine will be using that plastic to verify the member name on the account.  The other information needed for verification will be manually entered by the member. Since this is a shared branching transaction, the member will be required to enter their account number and other information to verify they are the member; and, then assign a PIN number to be used during subsequent visits to the machine.

Members can also find these self-service terminals, known as Vcom machines, in 7-Eleven stores across the country.  They work the same as the NextGen ATM; however, members will need to enroll in these machines separate from the self-service terminals found in credit unions.  Also, the Vcom machines do require your credit union to opt in to allow your members to use them.  Members will find these locations on the website and mobile app, so PaCUSC does encourage your credit union to allow access to your members.  However, if your credit union does not allow your members access to these terminals, we ask that you communicate this with your members and staff.

The Vcom terminals will be expanding their reach in early 2015, when the total number of Vcom self-service shared branching locations will hit 2,500 – many of which will be located within 24-hour 7-Eleven stores. 

Self-service terminals combine the convenience of ATM access with a unique menu of services, including cash loan advances, loan payments by check, transfers between credit union accounts, and a recent history of items cleared. 

Together with 5,200 branch locations within the CO-OP Shared Branching network, this addition of Vcom units will bring the combined total number of shared branches and self-service units to nearly 8,000 across the country. 

Bank Secrecy Act Information Sharing

When large cash transactions are conducted at credit unions that are part of the shared branching network, and they require a CTR, we know that the burden of filing the CTR falls on the acquirer credit union and a copy must be provided to the issuer credit union.

However, what if your credit union wants to discuss this with the other credit union, can you do so without violating any policies and procedures?  That depends on if your credit union is signed up for 314(b) Voluntary Information Sharing.  We encourage all credit unions that are part of shared branching to sign up to share information through FinCEN.  There may be times you might want to share information about a mutual member; however, unless both parties are signed up you are forbidden to share information. 

If you have any questions on how to register for 314(b) Voluntary Information Sharing, here is a link to their website - http://www.fincen.gov/statutes_regs/patriot/section314b.html.

Issuer Loss Prevention Measures

Issuer credit unions may implement measures to help prevent fraud as it relates to shared branching transactions.  Here are some ways we encourage credit unions to review and implement:

  • Limiting access to new account holders until the credit union has established a relationship with the account holder.  If access is provided, the credit union should monitor new account activity and exercise extended holds if suspicious activity occurs.
  • Restricting access on accounts that have a history of problems, and/or losses, such as returned items, stolen ID, and/or suspicious or fraudulent activity.
  • Providing clear, timely warning messages on member accounts.  Credit unions should not rely solely on warning messages for preventing activity; account access should be restricted if appropriate. 
  • Establishing reasonable withdrawal limits on their host systems if deemed appropriate.
  • Monitoring large dollar and suspicious transaction activity.

If your credit union does establish any of these restrictions that could impact members, you will be required to provide disclosure of the restrictions to your members.

Due to increasing situations of fraud, we encourage limiting access to new account holders. Credit unions should monitor new account holders’ activity, even if they don’t restrict access.  In recent months we have seen accounts being opened at credit unions with the intent to defraud the credit union by depositing fraudulent checks at shared branches, and doing withdrawals before the check is returned.  By limiting access at shared branches to new accounts, your credit union will have the ability to monitor the account. This will give your credit union more control over extending holds and will ensure these transactions are done at your office(s).  If you do limit access to these accounts, please make sure you have a policy/procedure outlining how long the access will be limited and the steps involved after this time.  Your credit union should address what they will do if no activity has occurred on the account during this time frame; and, how your credit union will remove the restriction and notify the member of the service they now have access to, etc.

We want to make sure members have access to their account; however, we also want to make sure this convenience is provided to members and not anyone attempting to defraud the credit union.

Check Deposits and Loan Payments

When members are visiting a shared branch to make a deposit or a loan payment, members need to understand that checks should be made payable to them and not their credit union. 

The CO-OP Shared Branching policies and procedures indicate that checks need to be made payable to the member or business that matches the name on the account in which the item is being deposited.  So this means if a member has a check payable to someone else, including their credit union, this would restrict the item from being deposited or their loan payment from being made. 

Credit unions have made exceptions with loan payments when the amount is the amount of the monthly loan payment.  However, there have been situations when the member was attempting to make a larger loan payment, and, since this could be considered suspicious, they want to ensure the transaction is not fraudulent.

Please remind your members of this policy to ensure they don’t have issues when making deposits or loan payments.

Member Research

When a member needs to request copies of checks or receipts from transactions they performed at a shared branch, the member sometimes contacts the credit union where they conducted the transactions.  In some cases, the acquirer credit union may be able to research the issue directly with the member; however, sometimes this may not be the case.  Acquirers can only see a limited number of transaction detail for shared branching members, so if the member is unsure of the exact date, the member will need to be referred to their credit union to handle their request.  Should this occur, the issuer credit union will need to handle the research by contacting the acquirer with the date, time, location, etc., regarding the transaction. 

Regulation E says that the member should notify either credit union when they have a dispute or need copies of the transaction.  If the acquirer is contacted, the acquirer credit union acts as the contractual branch for the member’s credit union.  The credit unions should work together to research and resolve the issue within 45 days of member notification.  The issuer credit union is responsible for communicating with the member after the initial contact. 

Please make sure your credit unions are working together to handle these items.

June 2015 Mandate Notification

 

In early 2014, PaCUSC notified your credit union of the new ISO 8583 mandate; and the changes that would be required to support it from CO-OP. The ISO 8583 controls your Issuer and Acquirer interfaces and will impact processing shared branching transactions, as well as any additional products and services that are connected to your core data processing system through CO-OP. These products and services include:

• CO-OP Member support
• NextGen ATM by CO-OP for on-us transactions only
• CO-OP Mobile
• CO-OP My Deposit and My Deposit Mobile
• Mobile Remote Deposit Capture behind Sprig by CO-OP, Ensenta, Vsoft, or DeposZip
• Any other third party connections such as eZforex.com, emagineIf, PiggyBanc, etc.

Your data processor has been notified of the changes required to support the new ISO 8583, as well as the deadline. The release provided by your data processor must be available to your IT team or service bureau to install by 2 a.m. Central Time on June 29, 2015, in order to retain network integrity, which will be at risk if any data processor is out of compliance. There will be no waivers available for the June 29, 2015 deadline. If the new release is not installed, your credit union is at risk of a substantial service disruption for shared branching service and/or financial premium for the service.

PaCUSC and CO-OP is dedicated to ensuring this does not occur by maintaining regular communications with you and your data processor between now and the June 2015 mandate. We will continue to keep you updated on the progress of your data processor's certification; and we’ll notify you of any out-of-compliance issues that may result in limiting your access as an issuer and/or acquirer.

Thank you for your cooperation as we strive to improve the CO-OP Shared Branching network for your credit union and members. Please contact me with any questions.

Branching Out is a monthly publication of Pennsylvania Credit Union Service Centers, Inc.

For questions about this newsletter or about shared branching, please contact Sandy Shenk, PaCUSC State Coordinator, 800-932-0661, Ext. 5267.