Posted by William Charles on March 18, 2016
Checking Accounts

Published on March 18th, 2016 | by William Charles

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Got A Question For A Banker? Ask As Part Of Our ‘Ask A Banker’ Series

Update: As part of the $100 promotion that Northpointe are currently running with us, Bill has agreed to answer some more questions. So ask away below and we’ll try to get you some answers early next week! If you haven’t already, I’d recommend signing up for the $100 promotion as it’s stupidly easy to get the bonus and the account also earns an APY up to 5%.

When we did a review of the Northpointe 5% rewards checking account, they received a positive response from our readers and asked about advertising options. As always we said that all of our ads run through adsense, but we’d be happy to give them additional exposure for a Doctor of Credit readers only special. We bounce a few ideas around and then Bill Clancy (bio below) said that he’d be happy to answer reader questions, I asked on Twitter and got a positive response and here we are.

If you have a question that you’d like answered by a seasoned banker, ask it in the comments section below. We’ll choose a mixture of the questions that we find most interesting and some of the most popular questions (if you like the sound of somebody else’s question, just reply below their comment) to ask bill. Please keep the questions respectful.

Bill Clancy’s Bio

  • Bio: Banker with 15+ years of experience working for community banks and credit unions. Areas of expertise include rewards checking, consumer lending and digital banking (online banking, mobile banking).
  • Current Position: Vice President, Deposit Banking at Northpointe Bank
  • Twitter: @billclancy

This should go without saying, but I’ll say it anyway. We’re not being financially compensated by Bill or Northpointe bank for this series, we thought it would be interesting and they agreed. They have also indicated they would be interesting in offering a Doctor of Credit special at some stage, so if you have any ideas on what you’d like to see then let me know in the comments as well.



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Nick

My question:

If you’re depositing a lot of money orders from manufactured spending (i.e. using credit cards to buy money orders directly or indirectly) can you prevent a bank account shutdown by sharing the details with the bank about how you’re NOT money laundering? Remember manufactured spending is not “illegally-gained proceeds” and would not constitute money laundering, but MS is often confused with money laundering.

Matt27
Matt27

I too would be very interested in this question

jos
jos

I am interested in this too.

Tom C
Tom C

I’d also be interested to know if money orders are considered cash equivalents and therefore subject to currency reporting requirements for cash deposits/withdrawals >$10,000.

HoKo
HoKo

Second this, do money order deposits of greater than 5K/10K trigger CTR/SAR’s just like cash deposits?

Kint Sakurai
Kint Sakurai

This question is not a good use of the banker’s time. Take a couple of minutes and read the CTR form. It defines currency for you and then explicitly notes that the form is only to be used in transactions involving currency. Not currency and cash equivalents. Only currency.

Tory
Tory

Piggybacking on this – I’m curious as to whether if the “From” field has any bearing on how ‘suspicious’ a money order looks. I’d rather not put down my own name, or put a fake name, so I leave it blank. Sometimes I get my friends to put their name, but I’d never do that without their permission and I don’t want to hassle them doing it.

Basically – does the bank see the money order as more suspicious if the “From” field is left blank?

Kint Sakurai
Kint Sakurai

A follow up/part 2 for Nick’s great question. Lets say a customer would be depositing between 100-250k worth of money orders per month in his account and doing a mixture of ACH transfers and debit card purchases with the balance. These money orders would be the proceeds from manufactured spend and said customer would be willing to provide as much documentation as your bank would desire to substantiate the provenance of the funds. Would Northpointe be interested in their business? If no, why not?

HG
HG

I think most bluntly: Is there a monthly fee, deposit hold time, and an average account balance that would make such a relationship work for both parties?

Chuck

How long before taking out a mortgage should we keep a clean credit report? What about a car loan – is it necessary?

GordonBombay
GordonBombay

A follow up question regarding mortgages- any negative impacts o fhaving a bank account(s) separate from your primary account that has multiple large deposits/withdrawals within the same month?

Darv
Darv

I would love to know about this as well. Planning a new auto purchase in December. Purchase will be done by significant other and myself. I have around 10 pulls on both Equifax and Experian, she has around 7 on both (both projections for December). We don’t get much Transunion activity here.

We did a refinance of our mortgage in January of 2015 and at that time I had around 7 Equifax and Experian pulls. I had to explain each of them but those pulls did not affect our rate.

It would be nice to know what lenders think about credit score versus hard pulls. If all the debt/income ratios are very healthy, good mix of credit, everything is great except for hard pulls, I would like to know how that would affect the interest rate.

Drew
Drew

Given advances in technology, our society has begun to move to an “instant gratification economy”. Yet, as an example. when I transfer money via my bank it still usually takes 5 business days. What is Northpointe doing to meet this emerging “instant” customer demand?

Jon

Same-day ACH was just approved earlier this year. I don’t know how long it will take banks to implement it, but more info is available here: https://www.nacha.org/content/same-day-ach

Drew
Drew

Cool, didn’t know about this! Thanks for sharing

Tom C
Tom C

How do banks make money on rewards checking accounts paying significantly more than market rate interest? Is the assumption that you’ll lose money on the interest payment but make money on other services (credit card swipe fees, credit card interest, overdraft fees, mortgage loans, etc) provided to that customer?

David
David

I’d second this question. Is the good interest rate a loss leader for the bank?

rtlaw
rtlaw

I would like to have a list of which credit agency report each of the major banks pull – this would be useful for those doing multiple applications at around the same time.

harrv
harrv

Why do some banks like Amex and Barclays require authorized user credit cards to have a separate number from the primary card holder while others like Citi and Chase give the authorized user the same credit card number as the primary card holder?

trackback

[…] ago we asked you if you had any questions you’d like answered, as @billclancy (Bio here) from Northpointe Bank (who offered a 5% rewards checking account […]

NoonRadar

Thank you Bill & Will for doing this. What do we look like to Northpointe and other banks?

That is, I’m curious what’s the profit model/calculation for banks towards the MS (manufactured spending, miles and points) community. This is based on the assumption that Northpointe in this case reached out to the readers of this blog to provide some value (answers) in hoping to get its name out to them.

I mean, are we seen as a more or less profitable consumer group in this case, and why? Or is this just a way to reach out to another group of consumers that most banks probably don’t target directly?

Sean
Sean

Seconded, I want to know why Northpointe decided to reach out to DoC readers. I imagine many of our accounts will lose money for Northpointe, so it surprises me that you would do this.

I’d be very interested to see some statistics—what percent of people who sign up through DoC just open the account with $100 and don’t use it for anything? But I suppose it will be too soon to tell.

Curtis
Curtis

I’d like to know if/how banks see gift cards differently than debit cards (besides that most gift cards do not have a name on them). We all get a lot of push back and hesitation from stores when using a gift card with a PIN number as debit, but any card that doesn’t say “gift” on it seems to be no problem even without a name. When using an automated machine or any other process to where the store doesn’t see the card is a gift card, there is zero hesitation to take it as debit.

Matt27
Matt27

I’d be really interested to hear more about the effect of having a lot of open credit cards on your credit report has on the mortgage process. Should a consumer stop applying for credit cards within two years of applying for a mortgage so that there are no hard inquires on their report? And to that point, would a consumer get a worse interest rate just because they had a lot of hard inquiries even if they had a 760+ FICO score? Or do the hard inquiries even matter since the open revolving credit accounts will still always show on the credit report?

And finally, is all of this moot because mortgage lenders typically just consider your FICO score and the other C’s (capacity and collateral) or do lenders usually look through and consider your entire credit report?

I believe Bill touched on the subject in his responses but if there could be any more elaboration that would be fantastic.

marcmsj
marcmsj

I can speak about my situation when applying for my mortgage a little over a year ago. I had around 10 cards open at the time but a zero balance on all of them. The underwriter saw that I have a lot of cards and initially requested me to close a few of my cards since I “had too many and they were worried I would get into large debt down the road”. I had to fight this and explain that I had been very responsible (high credit score and a zero balance). It was a bit of a hassle but finally got approved without having to close any credit cards. So yes, they do look at open credit cards, but I’m sure YMMV. It might have been my high credit lines that scared him. Each lender is different though and some are more strict.. you can always try with another lender if one gives you a hard time.

Eric
Eric

What are the ramifications if you are caught lying on a financial application? For example if you write that you own a business but you don’t in order to get a business card.

Do you think CD rates will ever make a comeback? Several years ago you could easily get a rate of 4% and sometimes even higher.

dev
dev

I understand what Bill is alluding to regarding money order deposits: it’s unprofitable for the bank due to the compliance risk. There is little to no revenue generated for the bank, as most of these deposits are withdrawn (to pay back the credit card) very quickly, eliminating any opportunity for the bank to profit from float. The bank must perform due diligence to ensure it isn’t ML activity, which may include reviewing documentation as Nick suggested, but performing such a review costs money. Unless the bank has a reason to keep the customer (for example, if the relationship as a whole, which may include deposit balances, loans, investments, insurance, etc. as Bill said, is profitable), it makes more sense to sever the relationship.

My question for Bill is, what if we made the relationship profitable for the bank? Rather than expecting everything for free, what if we were willing to pay for these deposits, hopefully enough to cover the cost of AML compliance and some profit for the bank? One reference point is the “analyzed checking” accounts BoA and WF offer for businesses. Using WF’s (https://www.wellsfargo.com/biz/checking/analyzed) as a reference point, they charge $0.20 “per deposited item” and $1.00 “per deposit posted” (unclear if both are assessed for a check/MO deposit).

I for one would seriously consider such an offering if I knew the bank would be more cooperative with my activities. Like Nick, I understand the bank’s position and don’t mind explaining what I’m doing and providing documentation to prove it. Paying the bank for the service seems like a way to turn this into a relationship we’re both satisfied with.

Don L

I would be interested in any info the banker has around ChexSystems Inquiries and there impact on new account opening

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