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RFPBankDepository.doc

  1. 1. TEXAS STATE UNIVERSITY SYSTEM REQUEST FOR PROPOSAL BANK DEPOSITORY SERVICES April 4, 2008 TABLE OF CONTENTS I. Introduction II. General Statement of Banking Services Required III. Proposal Submission Instructions and Qualifications IV. Required Services V. Optional Services Attachment A: Schedule of Proposed Fees Attachment B: Campus and System Descriptions Attachment C: Balances by Institution Attachment D: Detail Service Volumes by Individual Institution
  2. 2. Texas State University System Austin, Texas Request for Proposal For Banking Services I. INTRODUCTION The Texas State University System (the “System”) is requesting proposals for a master banking services contract to be awarded May 16, 2008, with service to begin July 1, 2008 and extend through February 28, 2014as approved by the Board of Regents. Through this contract the System intends to minimize banking costs, improve operational efficiency, and maximize investment capabilities for all its institutions. This Request for Proposal (RFP) details the System's goals and the banking services required. The System is acting for and on behalf of its eight colleges and universities (institutions) to provide the best services and the most cost efficient and effective banking relationship(s). This RFP process identifies required services for each of the institutions and each institution will be able to join under the resulting contract(s). The System recognizes that not all banking institutions have locations to serve all its institutions. As a result, this RFP process may result in more than one banking services provider for the System, but, preferably not more than two banks. It is the desire of the System to reduce the number of banks currently being used and to assure that the most cost effective services are being provided to each location. The resulting number of contracted banks is not pre-ordained and only the results of the RFP process will determine how many banks will be contracted. If multiple banks are awarded a contract, the separate System institutions will then be free to choose which of the contracted banks will be used. System institutions will be required to use one of the contracted banks. However, there may be certain geographic or functional situations that will have to utilize deposit services with other banks. Regardless of the number of banking institutions chosen, each banking services provider will execute the same Master Depository Contract with the System which will fully incorporate the terms and conditions of this Request for Proposal (RFP) along with the proposal(s) submitted in response. The resulting Master Contract will encompass all institutions of the System. The banks’ specific ‘service agreements’ addressing technical terms and conditions, establishing technical arrangements and relationships, and defining specific service capabilities to be provided by the banking institution(s) as part of this process will be executed with the individual System institutions in order to accommodate differences and provide for signatory control. Each service agreement executed with the individual institutions will be appended to and become a part of the Master Depository Contract executed by the System. Through this Master Contract the System intends to obtain the highest level of service for each of its institutions regardless of their size or location, to minimize banking costs, to improve operational efficiencies, and to maximize its investment capabilities. This RFP outlines the System's cash management goals, specifies all required qualifications for banking institutions, delineates all banking services required, details the historical activity volumes on all accounts at all institutions, sets the method and terms of compensation, establishes contract standard provisions to be incorporated in the Master Contract, and provides all submission instructions. The banking institutions chosen shall agree to make all the required services agreed to by the System available to all institutions of the System at the proposed pricing levels during the entire contract period. Initiation of service for any new System institution shall be at the same pricing levels unless mutually agreed to by the System and banking entity in writing. The banks responding to this RFP must confirm that they understand and can operate within the multiple bank environment established by the System. No presentations to the individual institutions are desired before the final award of contract(s) is made. Institutions may require additional on-site presentations by the contracted bank(s) after award. Banks, in making a proposal, are confirming that efforts to present to the System’s institutions will be made on a professional basis and based solely on the conditions of this RFP. No arrangements for specific System institutions outside the parameters of this RFP can occur and could result in termination of the contract. Texas State University System 2 Banking Services Request for Proposal 2008
  3. 3. The banks are encouraged to address any service not anticipated by or outlined in this RFP that will improve the efficiencies of the institutions. The System is interested in utilizing the best technology to streamline cash flows and improve efficiencies. All qualified financial institutions are invited to submit a proposal. Every effort has been made to notify all banks in the institution’s service areas. Holding companies and individual banks responding to this Request for Proposal must be good standing with the Texas State Comptroller in accordance with Section 2252.903 of the Texas Government Code, must be insured through the Federal Deposit Insurance Corporation (FDIC), and must be able to demonstrate a capacity to meet the System’s requirements as stated in this RFP. II. GENERAL STATEMENT OF BANKING SERVICES REQUIRED The banking services described in this RFP are directed toward four major goals: - efficient utilization of available banking services and technologies, - 100% utilization of idle funds, - safety of System funds and securities, and - minimization of banking costs for the System. As a public entity the safety of the funds and assets of the System is paramount. The use of technology to minimize manual or time-consuming operations will be a continuing effort and the bank will be expected to bring applicable new technologies to the System's attention throughout the contract period. The System also intends to access the short term money markets through sweeps for the best available, reasonable yield. The institutions of the System (www.tsus.edu) are: - Lamar Institute of Technology, Beaumont - Lamar University, Beaumont - Lamar State College - Orange - Lamar State College - Port Arthur - Sam Houston State University, Huntsville - Sul Ross State University, Alpine - Sul Ross State - Rio Grande College, Del Rio - Texas State University - San Marcos - Texas State University System, Austin The institutions are discussed in detail on Attachment B to this RFP. The System’s administration obtains its own banking services in Austin and will not be part of this RFP process. Proposals may be made for all or only specified institutions. The proposal should clearly indicate the intended institutions. Consideration of electronic means such as remote deposit will made to offer the best services to each institution. The System requires a depository that is fiscally strong and able to provide the required services on an uninterrupted basis. System funds are public funds and fall under provisions of the Public Funds Investment Act and the Public Funds Collateral Act (Texas Government Code Chapters 2256 and 2257). All time and demand funds above FDIC insurance coverage must be collateralized at a 102% margin by securities authorized by the System. Texas State University System 3 Banking Services Request for Proposal 2008
  4. 4. III. PROPOSAL SUBMISSION INSTRUCTIONS AND QUALIFICATIONS By submitting a proposal in response to this RFP, depositories will be deemed to agree to the mandatory contract and service provisions contained herein. This RFP and the proposal submitted will be incorporated into and form the basis of the final Master depository services contract. 1. Local Presence To assure a close working relationship and to facilitate services, the System will give preference to those banks with full service capabilities within geographic proximity to its institutions. Banking institutions need not have a physical presence in the geographic boundaries of each of the System institutions; however, preference will be given to banking institutions which have major branch locations in the majority of the System’s locations. Geographic locations may require the use of multiple banks within the System. 2. Proposal Format In order to fully and equitably evaluate each banks’ proposal a standard reply format is required. Each proposal must include a response to each item in the RFP in the order given along with completion of Attachment A for its proposed fees. Only proposals submitted in the prescribed format and using the exhibit form provided will be evaluated for contract award. An electronic copy of this proposal is available on the web at http://www.tsus.edu/about-system/BankDepositoryServices.html 3. Schedule for Proposal Submission The System will make every effort to adhere to the following schedule. 04/04/08 Release of Request for Proposal 04/16/08 2:00pm CST Deadline for all questions pertaining to Request for Proposal 04/18/08 2:00pm CST Responses to all submitted questions provided 04/25/08 2:00pm CST Deadline for proposal submission 05/16/08 Board of Regents award of contract 07/01/08 Contract commencement 4. Proposal Submission To be eligible for consideration under this request, a total of four (4) complete copies of each proposal shall be submitted by 2:00 pm CST on April 25, 2008 to the two addresses below. Proposals received after that time at TSUS will not be accepted. The proposal must be bound and submitted in a sealed envelope or packet marked “Proposal for Bank Depository Services”. An accompanying transmittal letter must be signed by an individual authorized to bind the bank, state that the proposal is valid for 180 days from the submission date, state full agreement with the conditions and requirements of the RFP, and give full contact information regarding the proposal. Submission of the Proposal must be in both written and electronic form (on an accompanying CD). Three (3) of the proposals must be delivered by mail, express mail, or in person to: Dr. Roland Smith Vice Chancellor for Finance Texas State University System 200 East 10th Street - Suite 600 Austin, TX 78701 Texas State University System 4 Banking Services Request for Proposal 2008
  5. 5. Telephone 512-463-1887 Fax 512-463-1816 Email roland.smith@tsus.edu claire.jackson@tsus.edu A fourth complete proposal must be delivered by mail, express mail, or in person to: Linda Patterson Patterson & Associates 301 Congress Avenue, Suite 570 Austin, TX 78701 Telephone 512-320-5042 Email linda@patterson.net There is no limit on the size of the proposal but a complete, succinct, and unambiguous presentation of the services offered and the fees required will be required and expected. Proposals should provide a clear and straightforward description of services and the bank’s ability to meet the requirements of the RFP. Amendments or additional information supporting the proposal will not be accepted after the submission deadline unless requested by the System. Withdrawal of proposals will be accepted up to the deadline for proposal submission time and date above. Any banking institution submitting a proposal is deemed to have read, understood and agreed to all terms, conditions and requirements set forth in the specifications. The selection may be made on the basis of the proposals as initially submitted, without discussion, clarification or modification. The System reserves the right to request further information or presentations or enter negotiations for terms as part of the evaluation. 5. Pre-Proposal Conference There will not be a pre-proposal conference. Questions regarding this RFP, or the services requested in it, will be accepted in e-mail form to Mr. Roland Smith, roland.smith@tsus.edu, on or before 10:00 am CST, April 16, 2008. Responses to any material question submitted will be communicated via e-mail to all known proposers by 3:00 pm CST April 18, 2008, as necessary. 6. Selection Criteria The following criteria will be used as the weighting basis for evaluation of the proposals and the award recommendation. 40 % - responsiveness, innovativeness, and ability to provide services required, 40 % - banking services costs, 10 % - potential earnings through banking facilities and sweeps to maximize System income, and 10 % - creditworthiness and stability of the bank. Award may not be made to the bank(s) submitting the lowest price proposal. The System will choose bank(s) submitting the most responsive overall proposal(s). 7. System Rights The System reserves the right to: - waive any defect, irregularity, technicality, or informality in the proposal or proposal procedures, - reject any and all proposals, - accept any proposal or portion thereof most advantageous to System, - request additional information or require a meeting with bank representatives for clarification, - cancel, revise, and/or reissue this request for proposal, Texas State University System 5 Banking Services Request for Proposal 2008
  6. 6. - negotiate with proposers, - modify deadlines, and - select any proposal deemed to be in its best interest as determined by the System. 8. Bank Compensation The System and its institutions reserve the right to utilize either a fee basis or compensating balance basis (or a combination of each) for payment of services under the contract. The intention is to use a fee basis. The System reserves the right to change the payment methodology during the contract period upon no less than 30 days written notice to the bank with the change commencing the first of the following month in order to react to changing interest rate environments. Not all institutions of the System currently sweep balances. The System is interested in daily sweeps for each to a SEC registered money market fund or to an internal interest bearing account if proposed by bank as an alternative. - When a compensating balance payment basis with a sweep is used, all accounts will be swept to their compensating balance. Fees will be paid directly. - When a fee basis with a sweep is used, all accounts will be swept to zero. Within five business days after receipt of the monthly account analysis (and approval of those fees by the System) the bank may direct debit the designated account for fees due. A complete account analysis for each individual institution will be required monthly regardless of the payment basis. A consolidated account analysis for multiple institutions served in the System is not required. All item and account charges will remain at the proposal price quoted for the duration of the contract period regardless of changes in service volumes. Should new services be required during the contract period not contemplated by this RFP, those services will be provided at fees not more than the bank’s then-current published rate and approved by the System. IV. FINANCIAL OVERVIEW The Vice President for Finance at each institution will be responsible for all banking, treasury, and investment activities in the individual institutions. The Vice Chancellor of Finance for the System is responsible for the same functions as well as accounts receivable, accounts payable, payroll and financial reporting functions for the System itself. The Vice Chancellor reports to the Chancellor and the System’s Board of Regents. The System and its institutions all require fully automated transactions, accounting and reporting in their goal towards elimination of paper and manual handling in each institution. The institutions current service usage is detailed on Attachment A and summarized below. Fraud Tax Serial W. # Accts ZBA Sweep Intraday ACH filter Pymt PP CD Partial/Full Sort Lkbox Lamar Univ. 4 x x x x x x x Lamar Orange 2 x Lamar PA 5 x x x x x x Lamar INT 2 x x x x x SHSU 3 x Sul Ross 3 x Sull Ross MS 1 x TX State 26 x x x x x x x Texas State University System 6 Banking Services Request for Proposal 2008
  7. 7. The System receives and consolidates all debt payments for the Universities of the System in Austin. V. REQUIRED FINANCIAL INSTITUTION INFORMATION To be considered the proposal must include a response to each question in this Section in the order asked. 1. In order to fulfill the System’s fiduciary responsibility please provide an audited annual financial statement for the bank’s most recent fiscal year. The bank will be required to submit an audited statement annually during the contract. Please provide and confirm agreement to this condition. 2. Is the bank offering any transition or retention incentive? Will this be offered equally to each institution? Explain fully. 3. List references from at least three of the bank’s current, comparable university clients. Include the length of time under contract, a client contact, title, and telephone number. 4. Provide the bank’s most recent Highline, Veribanc or comparable bank rating from an independent rating service. If not available, provide the dual ratings of senior and subordinate holding company debt. The bank will be responsible for notifying the System within thirty (30) days of any change in this rating during the entire contract period. Please provide and confirm agreement to this condition. 5. Provide a copy of all agreements (even if not directly referenced or required in this RFP) which will be required to be executed under the contract for services rendered. Any changes required on the agreements will be made and agreed upon before award of the contract is made by System. 6. Customer Service. Service to the institutions will be a primary focus of the evaluation. Describe the bank's philosophy and approach to satisfying the System’s banking and service requirements in responses to the following. a. How does the bank intend to support the ongoing operational and technical needs of the System and the needs of the individual System institutions? b. How many individuals does the bank have in each of the local banks to support the institutions and how will these individuals work together for the best service levels available? c. How will local service and overall contract performance be monitored at the holding company level? d. What, if anything, is distinctive about the bank's approach to customer service? How will this be expected to impact the System and its institutions? e. What provisions has the bank made for business continuity planning and operations? What support will the bank be able to offer the System in a disaster situation to maintain stable banking functions. 7. Provide the proposed, detailed timeline for implementation of the contract including the activities required by both parties and assignment of responsibilities during implementation. - Note any provisions or requirements for a contract which would extend potentially across the entire System and how and when the implementation of services could or would be scheduled in a multiple institution environment. Texas State University System 7 Banking Services Request for Proposal 2008
  8. 8. - If all institutions were represented under one contract when could all services commence? - Denote any limitations to adding System institutions during the contract period including timeline requirements. VI. REQUIRED BANKING SERVICES To be considered, the proposal must include a response to each of the questions in this Section in the order given. All fees for associated and anticipated services must be detailed on Attachment A. 1. Consolidated Account Structure with Sweep Mechanism The System is interested in assuring that all funds are earning at the best available interest rates at all times. Not all entities currently sweep account balances but the System would like to initiate a ZBA sweep structure in each institution. The bank should offer an automated, daily sweep to a money market mutual fund (or internal bank alternative account, if applicable and competitive) in order to reach its full investment goal. An SEC registered government, or enhanced government, money market fund is preferable for the sweep. If the bank has a valid alternative to a SEC money market fund, it should be presented. The bank shall clearly stipulate and describe the bank's most cost effective methodology for creating the sweep structure. The sweep would preferably be from the individual accounts with interest applied to that specific account. Automated distribution of interest to the individual accounts is preferred but not required. Sweeps may be structured from a master account with zero balance accounts (ZBA) if that proves more cost effective. The proposal should present the bank's most efficient and cost effective methodology. A repurchase agreement or offshore accounts with the bank are not acceptable as sweep investment vehicles. a. Fully describe the proposed sweep mechanism to be used by each institution focusing on the bank's most cost effective structure. Detail whether the sweep will be from a master account with ZBAs or directly swept from the individual accounts. b. Are funds swept (in and out) at the end of the day or next day? If swept next day, how are funds left in the account collateralized and interest applied? What is the rate on the delay? c. Provide the average of the monthly rates on your best sweep option for the period April 2007 through March 2008. d. Provide the average of the monthly ECR rates for the period April 2007 through March 2008. e. Provide the average of the monthly rates on your interest bearing accounts for the period April 2007 through March 2008. f. If the bank is proposing an alternative to a sweep, such as an indexed interest bearing account, detail and describe fully. Provide the rate history for such an account from April 2007 through March 2008. f. Will the System need to initiate any daily or periodic transactions or transfer balances for sweeps, under any condition? If so, describe. g. Describe how sweep interest will be distributed (i.e. at the account or master account level). h. If an SEC registered money market fund is utilized for the sweep proposal, provide the full name and identifying cusip of the fund along with a copy of the prospectus. Is there any minimum investment amount required? i. If the bank can not provide a sweep structure what account structure is most effective? j. Interest earned on interest bearing accounts shall not be charged as an expense on the account analysis. Confirm agreement to this condition. The System may be required or may desire to open additional accounts, or change account types during the contract period. If this occurs the new accounts and their services shall be provided with the same features and be charged at the same contracted amount as the accounts described in this request for proposals. Texas State University System 8 Banking Services Request for Proposal 2008
  9. 9. 2. Automated Cash Management Information Access The System is striving for efficiency in its operations and attempting to reduce paper transactions and staff time in the processing of transactions. The System is not interested in instituting formalized treasury workstations in any of the institutions, but, complete and timely information flow on a detailed and summary basis and cross-functionality of reporting is a major objective. Merchant services will not be included in this RFP consideration. The System requires automated cash management services with prior day and intra-day (as optional) detail and balance reporting for timely access to information and transactions. It requires a high degree of automation within the various service areas such as ACH, reconciliation, and, increasingly, EDI. Imaging of all checks and image retention and access is required. Imaging of deposit slips and deposit items is preferred. Preferably, all reports, statements, and account analyses will be available in electronic form. Minimum automated daily reporting services shall include: • prior day summary and detail balance reporting on all accounts, • intra-day detail reporting on most accounts, • initiation and monitoring of stop pays, • initiation and reporting of positive pay and exception transactions, • initiation and monitoring of wire transfers and ACH, and • initiation and monitoring of internal transfers and wires. a. Fully describe the bank’s online service capabilities. List system capabilities (i.e. balance reporting, wires, positive pay, stop pay, etc.). Are all services provided through one portal? b. Describe your transmission capabilities for financial files. What is used to assure secure internet connectivity? (HTTPS, FTP/S, AS2, S/FTP, PGP, GNUPG, etc) c. Do the bank’s systems include a standard cash forecasting module or capability? d. Detail the availability of prior day and intra-day detail and summary reporting. When is prior day information available? Is intra-day information real-time? e. Are all checks imaged and retrievable online? f. Define the history retention features available. g. What information is available for download or retrieval? Through which system modules? h. Can data be drawn across modules and activities for reporting purposes? i. Can deposit information be segregated by location? When and how is this accomplished? j. Describe provisions for off-site backup and continuation of services in a local or regional disaster situation. What disaster recovery services can the bank offer if the System institutions cannot operate from their facilities temporarily? k. Are online services charged on a bundled or separate module basis? l. Describe the security protocols for online services. How is authentication and authorization provided? How is the administration of the security module established and maintained? m. What are the hours of available technical support? Where is the technical support located? How is it accessed? n. What degree or type of information technology consulting will the bank provide as part of this contract? o. Submit samples of major screens and reports available or provide a website and sign- on information for an online review of all the system functions, if available. p. Does the bank solicit information from users of the systems regularly? How? q. Is the system a proprietary system or provided by a third-party? If so, what company? How is support provided in a third-party arrangement? Texas State University System 9 Banking Services Request for Proposal 2008
  10. 10. 3. Depository Services Standard commercial deposit services are required for all the System’s institutions. Deposits are currently collected, balanced, and deposited from various locations within the institutions dependent on need. Daily deposits will vary in number, size, and break-down as shown on Attachment A. All the institutions will make deposits to the banking institution’s branch, banking center, or vault by contracted courier or armored car service as well as institution personnel. The System is moving towards deposit solely by armored transport but initially multiple methodologies will be used. Only Lamar University utilizes a wholesale lockbox with minimal volume. Texas State University uses controlled disbursement services. In general, deposits will consist of checks, strapped or loose currency, and loose or rolled coin. The System is trying to initiate recycling of its own internal coinage to reduce deposit costs but a large amount of currency/coinage is still deposited, and required, by most institutions. No institution in the System encodes checks. At most institutions, the System accepts credit and debit cards over the telephone, the internet and in person at numerous points-of-sale. All merchant services are handled currently outside the banking contract. Merchant services will not be addressed in the RFP nor be a part of this contract. The System requires same bank day credit on all coin and currency deposits, and on-us checks. All cleared deposits received by the bank's established deadline and in accordance with the banking institution’s availability schedule must be processed in accordance with that availability schedule or an expedited schedule as offered by the bank. The bank shall guarantee immediate credit on all incoming wire transfers. Failure to credit System accounts in a timely fashion will require interest payment reimbursement to the institution at the then-current daily Fed Funds rate. a. What is the bank’s daily cut-off time to assure same day ledger and, pending availability, collected credit at banking center, branch, vault, remote, and night deposit locations? Specify the times for each location which will serve the individual System’s institutions if these times vary. b. What are the requirements for separating cash and checks if any? Is rolling of coin required? c. Is there any limit to the number of deposits in one bag? Are these handled on separate advices? d. Do the advices reference location? e. When and how are credit/debit advices sent from the deposit location? Are these advices available online? Preference will be given to electronic delivery. f. Are originals or images of originals included with each advice? g. Can the bank capture activity by account and location on the deposit advices? How? Is location reporting available when linked to other services/reporting? h. What level of reporting is given on received items? i. Is online cash vault reporting available? Is vault supply ordering available online? j. Are all deposited checks, deposit slips and deposited items imaged and reported online? k. Are return items accessible by location? l. Are returned items imaged and available online? How are they processed? m. Does the bank identify and adjust all discrepancies? If so, at what levels? What method is used for delivery of adjustment notices, if any? n. How and when does notification occur on return items? List the elements reported. o. What type deposit bags are used or required? Are these available through the bank at cost? p. Are dual verification security measures used on receipt of all deposits and at each type deposit location? (Banking center, branch, teller and vault processing.) q. State any differences in the bank’s “Availability Policy” from its published Availability Schedule. Are any deposits or credits delayed for any reason? r. Fully describe any expedited availability offered. Texas State University System 10 Banking Services Request for Proposal 2008
  11. 11. s. When and how is provisional credit given? If provisional credit is given on deposit, when does verification occur? t. How much advance notice is required on coin and currency orders? Is there any minimum purchase requirement? What is the turn-around time on orders? u. Describe the bank’s standard return and reclear processing. Do return records identify the depositing location, reason, and transaction? v. Include a list of all the bank's deposit locations and deposit alternatives relative to each System institution’s location. How would the bank address service if not located near a particular institution. w. Describe any program the bank has for automated collections management and consolidation. x. Cost out the following described deposit as if (i) made at the vault, (ii) at the banking center, and (iii) as a night deposit. SAMPLE DEPOSIT: The sample deposit would be made (a) in four (4) tamper-proof deposit bags, (b) with strapped where possible as shown below, (c) with coins that are not rolled, (d) with tapes attached to bundled but not endorsed checks. Currency Denom. # Straps Loose $ Total $ $100 5 $ 300 $ 20,300 $ 50 6 $ 600 $ 15,600 $ 20 4 $ 340 $ 4,340 $ 10 9 $ 70 $ 4,570 $ 5 22 $ 175 $ 5,675 $ 1 50 $ 14 $ 2,514 $ 52,999 Coins $ .25 $ 427 $ .10 $ 114 $ .05 $ 10 $ .01 $ 2 $ 553 Checks 280 checks $140,252 $ 140,242 $ 193,794 Controlled Disbursement Currently Texas State University uses controlled disbursement. a. Is positive pay in place on controlled disbursement accounts? b. Describe fully the alternatives available for a controlled disbursement account at Texas State. Which bank would be designated for controlled disbursements? How many Fed letters does each receive daily and when? c. When is controlled disbursement clearing information available? Is this information available online? d. Describe the controlled disbursement funding process? Is this done through a ZBA? Are transfers charged? e. Are the controlled disbursement points designated a high dollar group sort (HDGS) endpoint? What percentage of items is collected on first presentment? On second presentment? Do the locations also clear from local clearinghouses? f. What is the average daily amount and number of items processed at the controlled disbursement locations? g. As a matter of policy, will the endpoint contract with other banks to accept direct presentments? h. Does the endpoint allow cashing of over-the-counter checks? Texas State University System 11 Banking Services Request for Proposal 2008
  12. 12. i. Can third party ACH debits be charged to the controlled disbursement endpoint? Can they be filtered or blocked? Remote Electronic Check Acceptance and Conversion The System is very interested in establishing remote point-of-sale/back office check acceptance and conversion including deposit of both consumer and commercial checks at each institution. It is anticipated that the System will expand this collection process to all locations during the contract period, if cost effective. a. Describe the bank's processing capabilities in capturing checks at point-of-sale and in a back office conversion process. b. Are images available online? When? For how long? c. Does the bank provide remote deposit processing currently? Give three references for comparable size or use entities. d. Describe the process for remote processing of checks. What disclosing signage is required? e. Can batches be calculated and deposited at multiple times during the business day? f. What is the final cut-off time for batch deposit? g. How is notification of a reject made and to whom? h. Are there any dollar limits on checks accepted? (below the $2,500 maximum.) i. What options does the institution have in scanners for use with the process? Is this equipment available through the contract? j. List the equipment required along with its approximate cost(s). Describe any lease or sale options through the bank. k. List any other equipment needed to complete the remote collection process at each location. l. Describe and provide a sample of the batch reports provided. 4. Standard Disbursing Services Standard disbursing services for all accounts are required to include the payment of all System checks without charge upon presentation. The System requires positive pay services for all its checks and accounts. Texas State currently uses a controlled disbursement account. a. When is daily check clearing information available online through intra-day reporting? b. The System requires that the bank cash free of charge all on-us checks for employees and students regardless of the individual's account status with the bank. Confirm agreement with this condition. c. Describe any payment consolidation services. Define and illustrate the payee information received for single and multiple payments. Describe the processing and clearing schedules and provide the expected float savings. d. Provide examples of the reports or online information provided. Are all reports or data imaged. Give examples. e. Describe the handling of exception or non-standard items through the payment consolidation process. f. Describe any program the bank has for automated payables management. 5. Positive Pay Currently positive pay is used at only three institutions but will be required on all accounts under this contract. To safeguard against fraudulent checks, positive pay is required on all System accounts including controlled disbursement accounts. The System requires positive pay services with complete indemnification for fraudulent checks. Texas State University System 12 Banking Services Request for Proposal 2008
  13. 13. Currently where used, check register information is transmitted to the banks over the web. The proposal must provide a fully automated and web compatible transmission process. Transmissions will be made as part of each check run or manually. Manual check information must be able to be entered and transmitted online. The institutions will combine positive pay services with either partial or full reconciliation services in the institutions. a. Describe the data transfer/transmission requirements for computer-generated check runs. b. Describe the online input options for individual, manual checks written. c. Define the cost options with and without reconciliation services. How are charges applied with and without? d. Is exception reporting and handling managed totally online? Describe the process. e. How and at what time is exception information reported to the institution? f. What is the response deadline time for exception elections? g. Do you require any paper transactions on positive pay notification or exception decisions? h. Are all checks, including those received by the tellers and vault, verified against the positive pay file before processing? i. How often is teller information updated? j. What elements are validated on your positive pay processing? Does it include payee validation? k. Does the bank review exceptions such as encoding errors for possible repair before creating a exception item? l. Is email notification (an alert) available? m. Can changes to the file be made by ranges online? 6. Wire Transfer Service The System uses electronic transactions (ACH, wires and transfers) as much as possible to reduce paper transactions and is expected to increase the percentage and volume of transactions that are handled in this manner. Book internal transfers are heavily used by some of the institutions. The System is planning to require all checks over $10,000 be made by electronic means within this contract period which should further move towards the institutions to ACH transactions. Incoming wire transfers must receive immediate same day, collected credit. Wire initiation must be available online. Online wire and transfer monitoring is preferable but not required. A few of the institutions have ongoing needs for occasional international wires and will require full information on these wires as well as domestic wires. a. List the methods of wire initiation and monitoring available. Is information real-time? b. How is cancellation of a wire or transfer made? c. Does the system provide for batch processing of wires and transfers? d. What back-up is available to the online wire initiation process? e. Does the bank process international wires the same as domestic wires? f. Is a paper follow-up transaction required in addition to any online wire or transfer transaction? g. How will the bank notify the institution of incoming wires? h. When are wires posted online? Are email alerts used? i. Discuss the security provisions for wire transactions and transfer transactions. What entity controls the security administration? What secondary or tertiary authorization features are available online? Is dual authorization required? j. Is future dating of wires available? How far in advance? k. Is future dating available for both repetitive and non-repetitive wires and transfers? l. Is it possible to cancel a previously warehoused wire? How? Texas State University System 13 Banking Services Request for Proposal 2008
  14. 14. m. Is the Fed reference number included on each wire? The complete trailer? Is it reported on all reports? n. Does the bank have wire template storage? Under what conditions or limitations? o. State the bank’s policy on the use of ledger balances for outgoing wires in anticipation of known daily activity or incoming wires. 7. Safekeeping of System Securities Although currently the institutions use local government pools as their primary investment vehicle, the System may have a need for safekeeping services at individual institutions during this contract period. The ability to clear and safekeep securities must be available through the depository. The bank will be required to provide book entry safekeeping services. All investments will be made by the institution and instructions for clearing and safekeeping will be provided to the bank in writing via e-mail or fax. All clearing will be made delivery versus payment (DVP). The System has no obligation to invest its funds with or through the bank. All System investments are made on a competitive basis. • Custody must be in the bank and not a brokerage subsidiary of the bank. • All securities must be cleared on a delivery versus payment (DVP) basis and System ownership documented by original clearing confirmations and safe-keeping receipts provided within one business day of the transaction. • All coupon payments and maturities must receive automated same day collected credit on the System designated account without requiring any additional System action. a. Is the bank a member of the Federal Reserve and DTC? If not, name the correspondent bank to be used for clearing and safekeeping. b. Describe any safekeeping arrangement proposed with a correspondent bank including processing requirements by the institution or System. No delays or additional transactions are acceptable. Any institution may choose to purchase time deposits from the bank but all time deposits, like securities, will be competitively bid at the time of purchase and not be part of this contract except as regards collateral requirements. 8. ACH Services The System expects to move toward increased use of ACH. ACH services are required. The System will continue to move towards more complete and active use of ACH in both collections and disbursement. Currently, ACH is currently used for payrolls, transfers, and for some vendor payments and collections. The System does not have a mandatory direct deposit policy but actively encourages its employees to move to direct deposit. Utilization of ACH for customer collections has been limited but increased use is a goal of the System. Currently only a small percentage of payments are made by ACH. Texas State University System 14 Banking Services Request for Proposal 2008
  15. 15. The System requires a pre-notification on all new addresses. a. Is online ACH service fully available for individual transactions as well as batch transmission? b. Are the cut-off times ever different from standard NACHA rules? State the availability policy for debit and credit ACH transactions if it differs from standard NACHA availability. c. What are the processing parameters for international ACH transactions? Describe any differences in these transactions from domestic ACH. d. Can the bank offer any service which allows ACH debits to accounts without release of the actual account numbers being debited for protection? e. What is the policy on and handling of ACH returned items? f. Can ACH items be future dated? g. Can modifications be made on transactions submitted and warehoused for transmission? h. What specific ACH filters and blocks are available? Define and describe all your fraud filter options. i. What options are available for reversals and deletions? j. Are ACH addenda shown in their entirety online and on reports and statements? k. Does the bank routinely pre-note? 9. Account Reconciliation Currently four institutions use partial or full reconciliation services. Two use serial sort which should be eliminated during this contract period. The System requires availability of both partial and full reconciliation services, combined with positive pay, at all institutions on accounts with the possible exception of those accounts established for extremely low volumes. a. Describe the bank’s partial reconciliation services. b. Describe the bank’s full reconciliation services. c. What level of automation is available on both levels of reconciliation? d. How much flexibility is there for bank systems to interface with existing in-house systems? What support will the bank provide on transition. e. Specify reporting alternatives and provide samples. What categories do the ARP statements include? f. Are there optional or client defined reports available? Do reports specify multiple locations? What sorting and subtotaling is available on downloads? g. When are reports available from partial and/or full reconciliation? How are they provided? 10. Collateralization of Deposits The Master Depository and Banking Services Contract will address the following conditions for collateral provided to each of the institutions. The bank must agree to obtain and maintain acceptable 102% collateral to cover all time and demand deposits above FDIC coverage at all times during the contract period. The proposal must state agreement and compliance to the following terms and conditions. • All collateral pledged must be held in an independent, third party bank outside the bank’s holding company. • A tri-party safekeeping agreement shall be executed between the System, the depository, and the safekeeping bank for custody of pledged securities in full compliance with FIRREA requiring a bank resolution by the bank board or loan committee. (Or completion of Circular 7 if the Federal Reserve is acting as custodian.) • All time and demand deposits will be collateralized at a minimum of a 102% margin on principal plus accrued interest at all times, net of FDIC insurance. Texas State University System 15 Banking Services Request for Proposal 2008
  16. 16. • The bank will be contractually liable for the continuous monitoring and maintaining of collateral at the System's required margin level of 102%. • Pledged collateral will be evidenced by original safekeeping receipts/report sent directly to the System by the custodian within one business day of settlement. • The System shall receive a monthly report of collateral pledged including, at a minimum, description, par, market value and cusip on each security. • Substitution rights will be granted if the bank obtains the System’s prior written approval and if substituting securities are received before previously pledged securities are removed from safekeeping. • Collateral will be provided three days prior to initial deposits being made. • Authorized collateral includes only: o Obligations of the United States or its agencies and instrumentalities including mortgage backed securities which pass the bank test, without maturity limitation. a. State the bank’s acceptance of the collateral conditions above. b. Does the bank propose any collateral charges, if so how is the charge applied? 11. Account Analysis Monthly account analysis reports must be provided for each account and on a consolidated institution basis each month. Within five business days of receipt of the monthly account analysis (and subsequent approval of the fees by the institution) the bank may direct debit the designated account for fees due if compensation is being calculated on a straight fee basis. A complete account analysis will be required monthly regardless of the payment basis. a. Provide a sample account analysis including calculation bases. b. When is the analysis available each month? c. Is the account analysis available online? When are they available online? How long are they maintained online? d. Is the analysis on a CD-Rom monthly if one is produced? 12. Monthly Statements The bank must provide monthly account statements on all accounts with complete supporting documentation. All accounts must be on a calendar month cycle. Timeliness of statements is critical and non-performance will be grounds for termination of contract. a. Provide a sample monthly statement. b. State when monthly statements will be available each month on paper and online. c. Is the monthly statement available online? If so, when and how long is it available online? d. Are the statements on the monthly imaged CD-Rom if one is produced? 13. Overdrafts Every effort will be made to eliminate intra-day and inter-day overdrafts. However, should this situation arise, state the bank’s policy regarding account and total account overdrafts and detail rates and fees, if any, to be charged on a per event or per account basis. b. Are all accounts aggregated for overdraft calculation purposes or do accounts stand- alone? c. State the fee charged per overdraft occurrence. d. State any policy on the handling of overdraft items. e. State the rate basis for intra-day and inter-day overdrafts, here and one Attachment A. Texas State University System 16 Banking Services Request for Proposal 2008
  17. 17. 14. Stop Payments The institutions do have occasional stop pays. An automated stop pay process is required. a. What are the options available for stop pays? b. How often is teller information updated for stop pays? c. What are the options for extended stop pay periods? d. What is the deadline for same day action on stop pays? e. Are stop pay orders initiated on-line? Is there any paper follow-up document required? f. What information on current and expiring stop pays is available on-line? 15. Company Banking The System is interested in giving its employees the opportunity for enhanced banking services. a. Does the bank have a banking services program available for employees? b. List services provided under this program with applicable discounts or fees to the institution or employee. c. Is availability of the program based on use of direct deposit or institution employment? Section V. OPTIONAL SERVICES The System continues to investigate new services for inclusion under its banking services contract. These services n this Section are not currently required but will be evaluated in terms of availability, feasibility, service levels, services provided, and charges for potential current, or future, use under the System-wide banking contract. The determination on optional services to be used on an institution by institution basis. Availability of the service and level and cost of the service will be a secondary consideration in the evaluation of the primary proposal since the services are not required. The System reserves the right to accept optional services offered. If an optional service is initiated later in the contract period, the services and charges stipulated in the bank’s proposal in response to this RFP will be applied. If the bank currently does not offer the service identified, but is planning to make it available during the the contract period, the bank should so stipulate in its proposal and should state the anticipated date of activation. 1. Pay Cards Currently the campuses contract individually for campus cards through “Higher One”. Some campuses use the Higher One card as a campus card and as a pay card. The use of stored value cards for student use will not be addressed directly in this RFP. The bank is encouraged to offer its information however on any campus card program if felt that it sits materially into the banking relationship or makes it more efficient. Pay cards are not used by the institutions for compensation or reimbursement to employees. The institutions do not require direct deposit but do use it for compensation. Texas State University System 17 Banking Services Request for Proposal 2008
  18. 18. Employees using a pay card must have the ability to use the cards at point-of-sale as a debit card and/or for cash withdrawals at financial institutions and ATMs. The purchasing ability of the cards is and must be limited to the stored value of the card. The System is authorized to assess fees from the user for issuing the stored value cards. The bank is required to provide card holders with all processing and transaction information. Services expected from the bank would include at a minimum: - embossing, encoding and distributing cards as directed by System - provision of electronic statements to cardholders via online web access - administration of accounts: maintenance of accounts, application of funds, authorization of transactions, related tracking - customer service functions a. Does the bank currently provide a pay card service? Describe in full. b. How long has this process been available? Provide two comparable references for the service. c. Which program (authorization mark) does your program use? (Visa, MasterCard) Describe the standard card. d. Is enrollment online and does it provide for batched and individual item processing? Please describe. e. How is inactivity (dormancy) defined in the program and at what cost? What triggers inactivity status? f. Describe your customer servicing. Are multi-lingual customer service staff available? g. Describe data transmission requirements and deadlines? Texas State University System 18 Banking Services Request for Proposal 2008

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