Name: David Felton
Title: Vice President, Senior Business Banking Officer, Rockland Trust
Age: 31
Experience: 11 years
David Felton got his start in banking as a teller, but he got his start at Rockland Trust after he tried to poach some of their business clients. “I talked to countless people who banked at Rockland Trust and I could not get them to move over,” he told Banker & Tradesman. “So I thought maybe I should take a look at this.” He jumped at the chance when Rockland piloted a program for a business specialist position and hasn’t looked back. Felton recently made time to chat with B&T about working with nonprofits and counseling clients about fraud.
Q: How and why did you develop this specialty in working with nonprofit clients?
A:Probably over the past three or four years, I really dove into nonprofits. I dealt with a couple of them locally and really realized that they are an extremely underserved segment in banking. A lot of banks try to put them in the same categories and the same sort of products and services as a for-profit when their needs are a lot of times very different. You can’t put for-profits and nonprofits in the same pool, in my opinion. You need to separate it, understand them, talk to them, and a lot of bankers don’t understand nonprofits. They consider it like a business account.
Q: Can you give an example of how nonprofits need to be treated differently than for-profit clients?
A:A more complex one that I deal with a lot is, nonprofits sometimes will have excess funds that they have in a money market or something like that and maybe that money market is making 0.05 percent, depending on what bank they’re coming from. But nonprofits are also very interested in security, so with some banks, FDIC insurance only goes up to $250,000. What we have is called a repurchase sweep. What that means is, I do an evaluation prior to bringing on any client as to what their needs are, what the services are that they’re looking for, the products that we’re going to put them in, and there’s a cost to those, so we figure out, what’s the minimum balance that you need to keep in that account and everything above that we can sweep out into what’s called a repurchase sweep that is a savings account that is secured by government securities. We purchase those federal securities and then we sweep those out into that account on a nightly basis.
It’s similar to having 100 percent FDIC insurance because it’s in government securities, it’s in that savings account, but it’s still liquid. It’s not like a CD, where if you close out a CD, you have to pay a fee and you have to wait some time for it to get done. I’ve had clients who, we sweep the money for a year or two and then they say, “Hey Dave, we need to use this money to purchase X,” and we just close out the account, give them the money back and there’s no cost to it. So that’s one example where a for-profit company might just say, “Give me a money market account” and leave it at that, even though it may be over that $250,000 cap for FDIC insurance. They don’t tend to be as concerned with that as nonprofits. They want security and they want to make some interest.
Q: Fraud is a hot topic lately. What have you been seeing in terms of fraud and how do you help your clients guard against it?
A: I’ll give you an example of what happened with one of my clients. We had received an email from the controller of the company saying that the owner wanted to wire funds to someone in New York, and these guys don’t do many wires so we were hesitant to do it. We ended up reaching out to the son of the owner because we couldn’t get the owner on the phone and the son’s also on the accounts. We said, “Can you just confirm this?”
And it turned out that the owner’s business email had been hacked, so somebody else drew up that email and sent it to the controller of the company. The controller of the company did not call to confirm the email, so we caught it before the money went out. We had the documents drawn up, but we like to do our due diligence and check with clients before anything happens like that.
In regards to the tools that we have, there’s something called Positive Pay. Every day, a company or nonprofit will send us a list of the checks they wrote that day and we put it into the system so any check problem that tries to clear the system that isn’t on the list, we block it, we reach out to them. It’s a great tool for companies who write a lot of checks.
But fraud is definitely growing, and it’s something that all nonprofits and for-profits need to be very aware of and talk to their banks about in regards to the tools that are available to them to help offset that.
Q: How much of fraud prevention comes down to just having a one-on-one with your clients about what they need to look out for?
A: That is every conversation we have with a client. With new clients, that is part of the conversation and part of the on-boarding process. With existing clients, I try to meet with my clients every year or every six months, I pretty much talk to my clients every three months anyway just to touch base and update on any changes that are coming through, maybe update them on any new tools. Really it’s just to make them aware that those tools are available and when they’re ready and willing to take those on, we can have a follow-up conversation.
Felton’s Top Five Places In The World (So Far):
- Rome
- Glacier National Park
- Paris
- Honolulu
- San Diego
