[Emma]

Hi all,

If your credit union offers direct debits (or OpenBanking recurring payments) for loan repayments, what do you do when a member finishes paying their loans?

One of the things we like about standing orders and payroll deductions is that, unless the member chooses to stop them, payments keep coming in after the loan is fully repaid, and many of our members wind up saving quite a lot of money this way – mainly due to inertia! I think this is what the FCA would call “positive friction”. That said, the calculation would be different if we were paying significant transaction fees to receive savings deposits from a large number of members.

Do you allow your members to keep paying into savings via direct debit/OB? Do you stop their payments and encourage them to set up an S/O, and if so, do you have a lot of dropout as a result? Do you do something else entirely?

Emma K Carpenter - Compliance Officer - Sheffield Credit Union

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[Thomas]

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[Magdalena]

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[Emma]

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Emma K Carpenter - Compliance Officer - Sheffield Credit Union

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