How Not to Lose a Customer

Reg E changes. The term sends shivers down the backs of bankers all over the country. For those who aren't familiar with the changes, effective August 15, the Federal Reserve revised Regulation E to address checking account overdraft fees on certain consumer transactions. The final rule limits the ability of financial institutions to assess an overdraft fee unless a customer agrees, in writing, to the overdraft service. The consumer will be asked to either "opt in" or "opt out" of the service. If they don't respond by the effective date, they will automatically be opted out.

While this seems like a very consumer friendly act, it could very easily turn into a major issue for our customers. Many banks provided customers with a form of overdraft courtesy, essentially allowing customers to overdraw their account, pay the transaction, and charge a fee. While it is often abused by some, it can also prevent those occasions, like at the grocery store, where having your purchase declined would be really embarrassing. It's going to be pretty difficult to explain to a customer as they are closing their account because you "did this to them".

So it is incumbent on us to educate our customers before this goes into effect. But there's the real challenge. How do you explain the impact when they weren't even aware of this unadvertised, behind the scenes service? Bottom line is, for the sake of our customer's, we better figure it out.