An interesting thing happened after consumer protection laws went into effect. Instead of avoiding fees, most people have opted to pay them. 75% of consumers are signing up for overdraft protection, according to Moebs, a banking industry consulting service* who surveyed 2400+ banks and credit unions. Those who habitually overdraw their accounts (10 or more times a year) have nearly all signed up.
I’m not sure if this was intentional or not, but opting out of Overdraft Protection actually enables someone to overdraw their account with no penalty.
Case in point: I opted out of ODP on my daughter’s checking account (which is tied to mine online) so that she couldn’t go to McDonald’s and overdraw her account and end up paying $30 for chicken McNuggets. Her debit card should simply be declined if there aren’t enough funds there to cover her purchase. No gas. No fast food. No movie from iTunes.
When the new opt-in law for overdraft protection on ATM and debit transactions goes into effect on August 15, will your credit union be ready? At a recent CFO conference, only about a third of those attending said that they were already taking action to encourage members to opt in to overdraft protection for ATM and debit transactions.
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