EUGENE, Ore. – Saying holds placed on deposits are a “frustration” for members, especially those who have been longtime loyal members with stable account histories, Oregon Community CU said it is now using machine learning to do away with a “one-size-fits-all policy” in favor of a process that automatically evaluates various attributes to assign “unique hold thresholds.”
“Like most financial institutions, OCCU allows members to use mobile devices and ATMs to deposit checks,” the credit union said. “But since there is no in-person interaction, hold policies blindly apply to everyone, even the most long-standing members who have never caused the credit union a loss. Now, if the account and member qualify, this new program will automatically make available an additional amount of the deposit.”
According to OCCU, when a member uses the mobile app or an ATM to deposit a check that results in a hold, the new program scans a database to determine if the member qualifies and finds the unique hold limit attributed to the account.
It also scans recent activity to determine if escalating mobile or ATM deposits indicate possible fraud, the $3-billion credit union added.
Releasing the Hold
“If the member and the account pass all filters, the program will release the default hold, and replace it with the more favorable, lower hold, increasing the amount of funds available from the deposit,” OCCU said. “The program manages an aggregate total amount of additional funds that can be released to a member, which can spread over more than one deposit. For example, the member qualifies for an additional $400 released but today’s deposit is $1,300 they’ll have access to the entire $1,300 today and would still be eligible for up to $1,100 of a deposit being made available tomorrow if they make another deposit (including the final $100 of their ‘extra’ $400 allowance).”
Oregon Community said the automation reduces overhead costs and ensures consistency.
“Ongoing monitoring is in place to keep tabs on risk, model drift and equity,” OCCU stated. “The team expects the program to mature as it builds more intelligence, and the machine learning workflow used contains a built-in preprocessing step that balances economic bias.”
Early Signs are Good
According to OCCU, early indicators show no evidence that the program is detrimental to lower-income people, and it is anticipated that the program will responsibly evolve to include members and accounts from a wider swath of the credit spectrum.
“We are deeply committed to the financial well-being of our members and deploying this program couldn’t have come at a better time,” said Ron Neumann, OCCU’s president and CEO, in a statement. “We know that every dollar counts, and if we can help our members access their money faster, while also protecting against fraud, it’s a win all around.”
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