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RALEIGH, N.C.-Lowering overdrafts to just a penny actually saved Coastal FCU money in 2010.

The $2-billion CFCU instituted a one-cent overdraft fee for members that correct the problem before 11 p.m. the same day they overdraft or in cases where their account balances are not more than $10 in the red (Credit Union Journal, Aug. 23). Accounts that are more than $10 overdrawn after 11 p.m. are charged the standard $28 fee.

Members who opt in to the CU's overdraft program, called Bounce Guard Plus, are covered for all transactions, while those who do not are only eligible for check and ACH transactions. Marking Communications Manager Joe Mecca told Credit Union Journal the new policy is a permanent change.

Before the credit union developed the program, Mecca said Coastal estimated that a 20% drop in overdraft revenue would result post Aug. 15. With the program in place, CFCU has only seen a drop of 15%. "I think the results have been good with the program and we think there are many more members who will opt in once they have their debit card declined."

Mecca said the credit union's opt-in percentage has been steadily increasing as members "feel the pain" when transactions are denied. The CU has had 40% of its high overdraft users opt in. "We know we have about 16,000 members who in the past year have done two or more overdrafts. We'd like to see three quarters of that group opt in," Mecca said.

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