One CU Opting Out Of Opt-In

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HAMPTON, Va.-While many credit unions have pushed members to take advantage of their overdraft protection programs in light of new federal regulations, one CU is going in the opposite direction.

Langley FCU here has built a new "Opt-Out Café" microsite to convince potential members to ditch their old financial institutions that are pushing opt-ins for such programs.

"It's a decision that cost us several hundred thousand dollars in fees we could make," SVP/CMO Brett Noll explained, noting that Langley did charge overdraft fees prior to its new campaign. "We asked ourselves, should we really be doing this in the first place? And we just decided we're not going to do it anymore and it's in the members' best interest to...move them to other options."

The café at replaces the old "Whack-a-Fee" site with a straightforward blend of information on overdraft protection and a push towards a financial institution that's "different in a not charging you $30 for a cup of coffee kind of way." Noll noted that most consumers are seeing communications from their financial institutions telling them they can prevent embarrassment simply by using overdraft protection, but perhaps are not seeing advice from some financial gurus and national newspapers urging people not to opt into overdraft program. The café gives the $1.5-billion CU an opportunity to take a complex topic and boil it down in detail, Noll added.

"It's a huge differentiator for us from both the local banks and credit unions in the area. We're not being shy about letting folks know we made this decision. It's surprising to me that so many credit unions haven't decided to go in a different direction."

Members who normally use traditional overdraft products still have three options when their checking accounts are overdrawn. Members opening up new checking accounts are immediately cross-sold fee overdraft protection tied to savings accounts and given the opportunity to apply for a small line of unsecured credit. A Langley FCU credit card, for instance, would also provide an alternative to an overdrawn debit transaction; all three options are "a heck of a lot more affordable than a $25 fee," said Noll. "If none of these options work for a person and they have no money in their accounts, maybe they shouldn't be making that purchase. We're trying to do the right thing for members and as a result we hope we generate a lot more loyalty and get more members."

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