Post August 15th
OK, Bankers. On July 1, Reg E goes into effect with all new accounts.
It effects your existing accounts on August 15. And your customers/members need to respond to your opt-in request by August 11 to not be effected at the deadline.
So what then?
You have been frantically trying to educate and motivate your customers/members to get a response to your opt-in requests, but are you planning your post-August 15 strategy? Here are some tips:
Be Proactive:Despite your best efforts to educate your audience, you'll be amazed by how many complaints you'll receive when transactions are declined.
Communicate with ALL "opt-out" customers who are declined immediately. Email is ideal because of it's speed, a phone call is also fast (but more time consuming), use snail mail is necessary - heck even smoke signal if that's all you have!
- Explain that you acted according to their wishes
- Explain that you've attempted several contacts to notify of change
- Provide an opportunity to opt-in to avoid future declines
Prepare the front line staff and call center
- Reiterate the Reg E basics to your staff (they must be comfortable communicating about the regulation)
- Arm your staff with a list of (better yet, samples of) all Reg E materials sent to customers
- Provide staff the tools to help customers opt-in for future transactions
- Provide the questions your staff must ask to be able to recommend opt-in vs. opt-out
Add Opt-in to your On-boarding program
- New account customers who decline opt-in at first should receive communication within their first 90 days with your bank/credit union.
- Simply provide "real world" examples of what can happen with and without overdraft protection
Don't ignore your opt-out customers
- Cross-sell alternatives to overdraft like lines of credit or savings sweeps
This is a Commercial/SEG opportunity
- Educate local merchants about Reg E and it's likely effects (this can be an invitation-only on-site seminar and/or your Commercial/BD staff can go on the road with meaningful information)
- Stick to the basics - you're not talking to regulators or compliance people here! - Make sure it's clear that this effects ALL institutions, not just yours
- Provide merchants with material to give to customers who are declined so they can contact you to opt-in
Roughly 27.4% of non-interest income comes from NSF/Courtesy Pay - nearly half of that from POS and ATM transactions. I've talked to several institutions with millions of dollars at stake and we're weeks away from the deadline.
Take care,Eric
