Act Now to Grow Revenues and Avoid More Regulation

The Pew Trust today has published an article in the American Banker calling for more regulation and reform of overdraft practices.  They rightly point out that many consumers do not want to pay overdraft fees and want all items returned rather than paid.  Of course, some consumers want overdraft services and are willing to pay for them.  We can serve all the needs of consumers if banks and credit unions will simply offer choices rather than limiting choices.

Today, virtually no bank or credit union offers a checking account with no overdraft fees ever, not even return check charges.  Why?  Because they have not responded to the consumer demand and need for such a product.  Few even market a debit only account as “no overdraft fees ever.”  Yet competitors from prepaid cards to BankSimple are heavily marketing "no overdraft fees ever."

Banks and credit unions first should offer such alternatives because consumers demand it and will get the service elsewhere if they do not.  Further, because the segment is different than those that want to have overdraft services (which our clients can clearly demonstrate), no existing revenues will be cannibalized while new revenues are added.

Finally, if the marketplace offers a clear and attractive solution, then we will meet public policy needs without more regulatory red tape.  The choice is up to you.  Please act now!