NEW ORLEANS – Despite a pending deadline and the revenue produced by one subset of members, an informal survey of CFOs attending the CUNA CFO Council’s annual meeting here found that only about one-third reported they have begun the process of requiring members to opt-in to overdraft protection or so-called Courtesy Pay programs.
Credit unions must comply with new Reg E opt-in rules by July 1 for new members and Aug. 15 for existing members.
“If you are not beginning the process of opting in, you are really getting behind the curve,” noted Fabio Biasella, VP and Managing Director of Strategic Advisory Services for Raddon Financial Group. Biasella noted about 10% of most credit unions’ checking account-holders are habitual users of overdraft protection, but they generate a significant portion of many CUs’ fee income. “The good news is that when you ask the consumer if you want them to cover their charge, it’s not important to the member with no overdrafts, but it’s very important to the habitual overdrafter. They see the value in opting in,” said Biasella.
One CFO at the meeting told Credit Union Journal it has approximately 1,000 members who regularly use overdraft, and all of them have opted in.
