Questions for the Homeowner
Q
Can you process payments that are not accompanied by a coupon?
A
In most cases, yes. If the homeowner includes the full name of the association and their account
number on the face of the check, the information can be hand-keyed into the system and the payment
processed. If there is not enough information available, the check is returned to the management
office for manual processing.
Q
Can you receive electronic payments from homeowners initiated through their on-line banking systems?
A
Actually, these payments are not electronically transferred. When a homeowner pays through his on-line
banking service, a physical check is generated and mailed to the lockbox. When we receive it, it is
processed just like any other payment not accompanied by a coupon. Homeowners who pay this way are
encouraged to consider direct debit (ACH) payment instead, as it is faster, incurs no fee, and is less
susceptible to error.
Q
ACH and how does it work?
A
ACH stands for Automated Clearing House, the system whereby the Federal Reserve facilitates the automatic
transfer of funds from one bank account to another. You may know it as Direct Debit or Sure-Pay. After
receiving authorization from the homeowner, who provides the routing number and account number of his bank
account, the association (or its management company) generates an electronic file containing a description
of the homeowners' account, the association's account, and the dollar amount of the transfer. This file is
transmitted to the bank, which forwards it to the Federal Reserve, and the transfers take place.
Q
What happens if a payment "bounces?"
A
Regardless of whether it is a returned check or a returned ACH payment, the amount of the payment
is deducted from the association's bank account, along with a $10.00 fee. The management office
is notified of the returned item.
Q
Our association requires more than one checking account. Do we pay $15.00 for each account?
A
No. Only one $15.00 fee is charged per association. The fee for additional accounts is waived.
Q
What are the set-up costs?
A
Zero. There is no cost to open an account, and we provide your supplies (endorsement stamps,
deposit slips, check stock) free of charge.
Q
Who actually does your lockbox processing?
A
We do. Unlike some banks, we do not subcontract this service. Our processing facility is located
in Phoenix, Arizona. HOA payment processing is segregated; we do not mix it up with utility bills,
mortgage payments, doctor bills, etc.
Q
How do I go about renting my post office box?
A
You don't. We rent the post office box for you, and we pay the annual rental fee and handle
the renewals. In most cases, the post office box is in or near the city in which you are located.
Q
Many of our associations have already sent coupons for the year to their homeowners. Can
they use the same ones, but mail them to the new address?
A
Unfortunately, no. Our coupons must contain a scanable OCR line at the bottom for electronic processing,
unique to the lockbox. The payments must also be returned in a standardized windowed envelope. However,
in order to facilitate the transfer of associations mid-year, we will provide replacement coupons and
envelopes at no charge to those associations who have already paid for coupons for the year. The
association (or management company) need only incur the cost of postage to mail the new coupons,
envelopes, and payment instructions to the homeowners.
Q
As a management company, if I obtain a new association client in the middle of the year, will
you provide replacement coupons for them?
A
No. When an association migrates from one management company to another, they should expect
to incur the cost of printing new payment coupons.
Q
We send out statements rather than payment coupon booklets. Can you process those?
A
Yes, if the statement has a remittance advice at the bottom with an encoded scan line, it takes the place of a coupon.
Q
How do I get coupons?
A
Many management companies obtain their payment coupons or statements from third party vendors such as
SouthData or Bank-A-Count. We work with these vendors to test the coupons before they are mailed to
homeowners to make sure we can process them electronically when they are received at our lockbox.
Most industry-related software allows you to generate coupons or statements, and we have worked with
some of the major vendors to provide programming that encodes those to our specifications, so you can
do them in-house. However, our equipment does have strict requirements for paper size, thickness,
font type and location, envelope size etc., so coupons must be pre-tested, to ensure they can be read
by our equipment.
Q
What about resale's during the year?
A
If you do not have the ability to generate encoded coupons, we suggest the payments go to your
office for the remainder of the year, where they can be processed manually and sent to the bank
in your courier bag.
Q
What happens to the correspondence that a homeowner sends with their payment?
A
All correspondence included with payments is forwarded to the management office in their next
scheduled courier pick-up. "Love notes" and change-of-address information written on the coupon
itself will be intercepted on a best-effort basis, but as many of the payments are never seen by a
human, those can be overlooked. Homeowners should be instructed to send all correspondence and
change-of-address notification to the management office.
Q
What if the homeowner sends in a payment for an amount different than what is on the coupon?
A
The payment is processed for the amount appearing on the check. If the association or management
company does not want us to process unmatched payments, we can return them as exception items
for manual processing.
Q
How do you differentiate between a regular assessment payment from a late fee or a special assessment payment?
A
We can't. We do not determine how a payment is applied, that is done by the accounting software
at the management office. We only report the account number and the amount of the payment.
Q
We want our special assessments to be deposited into a separate bank account. Can you do that?
A
We can only deposit into one bank account for any one lockbox ID. If you want payments to go to a
separate bank account at the lockbox, they would have to be accompanied by a separate coupon with
a different identifier.
Q
Can a homeowner who owns more than one property pay for all with a single check?
A
Yes, if he encloses the coupon for each property along with his payment.
Q
What about multiple checks for a single property?
A
Yes, we can process these as well.
Q
If a property is in collection, and we do not want to accept payments through the lockbox, can you stop them?
A
Yes, we can program our system to reject payments from a specific account. These would then be returned
as exception items, to help guard against undetected restrictive endorsements.
Q
Our Board requires all checks have two signatures. Are you responsible if a check clears with only one signature?
A
No. In today's automated processing environment, banks are not able to verify the number of signatures
on a check, nor are they required to do so. At FNBA, signatures are verified only on checks greater than
$5,000, and then only for a single authorized signer.
Q
What if a homeowner receives a late notice, but they insist that they sent their payment to the lockbox?
A
Although one of the advantages of an automated lockbox system is to reduce the number of posting
errors, regrettably they do occasionally occur. Because each check & coupon are imaged and logged, we
can search our system for a specific item by check number or dollar amount to help trace the payment quickly.
Q
This all sounds too good to be true. How can you provide all these services for free when other banks charge so much?
A
Most banks treat common interest community associations like another small business and overlook their
unique characteristics. Almost always non-profit, CIC associations have a steady cash flow for operations
and over the long run, a generally positive cash flow into reserve accounts. Traditional per-transaction
analysis on the operating checking account only does not consider the large reserve deposits these associations
often maintain. Community Association Banc looked at the big picture and realized we do not have to charge
our customers high fees to provide outstanding service and to still earn a profit.
Questions for the Community Association
Q
What is Community Association Banc?
A
In January of 2000 the bank started the HOA program to generate core deposits for the bank. The
rapid growth of this department proved that this was a viable niche business the bank wanted to
participate in. In November 2002 the bank hired sales people in several other states. It was
determined that using the name Community Association Banc (CAB) would increase the visibility of
the bank on the national level.
Q
If someone comes into the branch and wants to open up a CD for a Homeowner Association, what should I do?
A
We would like you to call Community Association Banc @ (866) 800-4656. If you are in Arizona speak with
Anne Dill, if in Nevada speak with Denise Goins. If they are not available ask for Craig Huntington.
Q
Why should a branch turn over a large depositor to Community Association Banc?
A
We realize that all the branches have their own deposit goals. If we discover that the customer is
a small self-managed association we will recommend that they open their CD at the branch. However
many times the customer will represent one association managed by a company that manages hundreds of
associations. We can use this contact to meet with the management company and possibly get a very
large deposit relationship.
Q
What is the lockbox?
A
Most associations pay monthly or quarterly assessments. This requires the management company to process
all those payments. (Some management companies get up to 50,000 payments in a month). If they use
our lockbox, the payments are mailed to our PO Box and we pick up and process the payments. Daily
we send an electronic file to the management company that they load into their accounting system,
saving a tremendous amount of time for the management company.
Q
Is there a fee for lockbox?
A
We have discovered that in most all cases the earnings credits on the deposits offset any fees.
Q
Can the branch set up a HOA customer?
A
We would prefer all HOA customers be set up through Community Association Banc. CAB has special
signature cards and different rates then the branch.
Q
Will we loan money to a HOA?
A
We are very excited to lend money to any form of community association anywhere in the country. There
is no loan dollar limit and we have been able to finance every need that has ever been presented to us. You
will find us very flexible in structuring the loan to the needs of your commuity. Do not be concerned about
your communitiy's credit worthiness. Lets talk it over.
Q
Is there a problem with depositing more than the $100,000 FDIC insured limit?
A
We have special accounts that are insured above the $100,000 FDIC limit.
Q
Why is CDARS the best choice for deposits over $100,000?
A
It’s one stop shopping. With CDARS, you can enjoy:
- Safety - Your money can receive up to $50 million in FDIC insurance coverage.
- Convenience - You work directly with us. You earn one interest rate and receive one regular statement.
- Community Investment - The full value of your money can support lending opportunities in your local community.
- CD-Level Rates - Your money earns CD-level returns. Rates may compare favorably with other investment alternatives, including Treasuries, corporate sweep accounts, and money market mutual funds.
Q
How does CDARS work?
A
We are members of a special network. With help from a sophisticated matching system, we exchange deposits with other banks that are members of the network.
When you place a large amount with us, we place your funds into certificates of deposit issued by other banks in the network. We do this in increments of less than $100,00 so that both your principal and interest are eligible for complete FDIC protection. Other banks do the same thing with their customers’ funds.
Using CDARS, we swap your funds on a dollar-for-dollar basis with other network members. As a result of these exchanges, you can access full FDIC coverage and the total value of your deposit can be made available for community lending purposes.
Questions for the Property Management Company
Q
Why do you need my SS and DL number?
A
Federal Law mandates this requirement. The Customer Identification Program (CIP) was developed to help financial
institutions fight identity theft, the funding of terrorist activities, and other financial crimes. Compliance
with CIP is a necessary part of day-to-day financial activities. CAB is ever vigilant in its efforts to keep a
secure environment surrounding the association's funds and investments. CAB uses this tool as a means to
eliminate the possibility of mistaken identity. These documents are a vital component in maintaining the
security when accessing the association's accounts.
