BROOKFIELD, Wis.-Credit unions should prepare for many more Reg E opt-ins before year's end, according to Fiserv, which is proposing several strategies for CUs still seeking responses from high-volume overdraft users.
Based on its work with credit unions to communicate the new overdraft rules to members, data indicates the work is far from over, and that once you communicate with high overdraft users the right way, virtually all of them opt in, according to Fiserv.
Chris Menzer, consulting director, said 93.7% of high-volume overdraft users are choosing to opt in once they respond. "Less than 10% of this high-value group is actively opting out."
Based on Fiserv's data from client credit unions prior to Aug. 15, just over 60% of high-volume users have responded to credit union communications. Menzer reminded that once a member actively opts out, it is difficult to reverse the decision. Fiserv conducted extensive focus group research with high-volume overdraft users across the country to fine tune messages it helped credit unions deliver.
"The educational approach played best," stated Menzer. "Here's what's changing. This is a federal regulatory change and you need to take action so you can avoid the chance a transaction will be denied."
It is OK to communicate to members real-life situations in which they could experience a denied transaction, such as a grocery store purchase, Menzer said. But Menzer warned credit unions not to use scare tactics or take a tone that would embarrass members. "The high-volume users know what overdraft is about, and there is no need to beat them over the head with a message that would make them feel embarrassed," Menzer said. "Just tell them what has changed, what steps they need to take to avoid being declined. That's what they want to hear."
Fiserv has been helping credit unions by providing communications support materials, as well as a turnkey solution that includes outbound communications. Understanding the revenue pressure credit union are facing, Fiserv will soon come out with its "Revenue Expansion Program" to assist CUs in three areas: new deposit products, consumer liquidity, and loyalty/retention/cross-selling.
