As an 18-year-old newlywed attending college, Terry Zink racked up hefty overdraft charges on a checking account that seemed to be short of funds more often than not. Now, as an executive vice president at Fifth Third Bancorp, he has a new set of worries about overdraft fees.

"The pressure to regulate fees is so great now, and I think it's only going to increase in the next couple of years," Zink told fellow bankers participating Tuesday in Retail Strategies: Deposit Growth, an American Banker online forum.

Fees for nonsufficient funds and overdrafts supply a $17 billion-a-year revenue stream to the industry and are "also the part of our business that is most susceptible to legislation," Zink said.

But banks can do more than just prepare their call centers for the onslaught of customer complaints that Zink expects as account fees come under greater public scrutiny.

Fifth Third is trying the approach of "taking overdraft fees, which are viewed as punitive, and turning them into fee opportunities that customers see as value-add," said Zink, who oversees the company's affiliate banks. A new product that offers customers an advance on their direct deposits has been "overwhelmingly accepted," with about 80% of those trying it becoming repeat users. Zink credited the product with helping Fifth Third climb the standings in recent surveys ranking customer service.

"If we presell an overdraft in the form of a direct deposit advance, customers then are opting to buy, versus being punished for doing something," Zink said.

He also recommended the development of identity theft protection and debit protection services to offset fee revenue that might fall by the wayside as a result of new regulation. Offering gift cards, privacy monitoring services and banking packages — in which a free interest-bearing checking account might be made available to customers who have credit card or money market accounts with the bank — also could help fill the gap, he said.

The average fee for nonsufficient funds or overdrafts is just less than $29 per occurrence.

In good economic times and bad, the fees "have been the gift that just keeps giving," Zink said. In strong economic climates, spending exuberance can lead customers to accidentally overdraw their accounts, and in recessions overdrafts can be driven by necessity as people struggle with expenses. The advent of the debit card has made it even easier for customers to lose track of how much money is available in their accounts, Zink said.

But he predicted that Congress is about to crack down on fees.

Lawmakers are considering a proposal to prohibit banks from assessing overdraft fees when accounts are overdrawn because of debit card transactions, if holds placed on the funds exceed the transaction amount.

And as of Jan. 1, the Truth in Savings Act will be amended to require that banks periodically disclose aggregate dollar amounts charged for overdraft and returned-item fees, Zink said.

Had that kind of statement been sent to Zink and his wife in the early years of their marriage, "it would have always been my fault. I would have listened to her get mad at me and then I would have done the only logical thing that you could do," Zink said. "I'd get mad at the bank."

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