LEXINGTON, Ky.-Members are saying "yes" to courtesy pay by opting-in online at credit union websites, giving CUs hope that overdraft revenue will remain intact even after the Fed's Regulation E (Reg E) takes effect.
"Members simply click on our website banner to opt in," explained Piper Graham, president at $17-million Metro Employees CU (MECU) here. The online Reg E opt-in solution displays a Federal Reserve overdraft disclosure, upon which the member completes a secure opt-in authorization form and clicks "accept."
More than one-third of MECU members who have opted-in for courtesy pay have done so via the online channel, Graham said. Members can opt in or out face-to-face or by telephone, as well.
Opt-ins are critical to MECU's bottom-line, Piper said. Nearly 20% of the CU's revenue comes from ATM/debit fees and charges. "If we are unable to get members to opt in, a large percentage of this income will be gone come Aug. 16. Without this income, we would have to re-evaluate our ability to offer many of the convenience services that we provide free to members."
The Reg E Opt-In solution at MECU's website is provided by DeepTarget, Huntsville, Ala. The DeepTarget solution can be launched on the website, Internet banking and e-mail.
DeepTarget promises it can deploy the solution in three days in order to stay ahead of the July and August deadlines. "I was impressed with how simple the implementation was: I filled out the customization e-mail questionnaire and the platform was running the next day," Graham said.
About two-thirds of the members who have opted-in at Horizons North CU in Northglenn, Colo. have used an electronic solution to do so, according to Brad Harvey, CEO at the $65-million CU. Members can opt in via the CU's website, Internet banking or e-mail under the Regulation E Compliance Package provided by DigitalMailer of Herndon, Va.
Seven Seventeen CU is also using the DigitalMailer solution, said Karen DeSalvo, SVP-marketing at the Warren, Ohio-based CU. The $770-million CU chose DigitalMailer because it needs a solution that allows Reg E EFT opt-ins, and a solution for Regulation Z Truth in Lending opt-ins and opt-outs for VISA over-the-credit-limit coverage.
DeepTarget offers a quarterly contract option, too. "All credit unions are uncertain about the effects the Reg E will have on the bottom line. Committing to a year-long vendor contract when you're not sure about revenue doesn't make sense."
