Regulation Situation

When Regulation E hit, credit unions responded. Now industry leaders use it as a platform to engage members.


On August 15, changes to Regulation E took effect, compelling credit unions to present the advantages of overdraft protection. Overdraft protections are now an opt-in only service, and staffs across the country are using myriad tactics to engage their members. Curious about how other credit unions managed the opportunity? Here's a brief look at three industry innovators.

  • Envision Credit Union ($222M, Tallahassee, FL) used education and transparency to attack the situation. "We were upfront and honest with our members," says Edith Griner, senior vice president of member support services for Envision. The goal wasn't to increase fee income; rather, it was to make the changes straightforward to members. The tactic has worked, as 80% of members who used affected services chose to opt in. Of the members with active debit cards, 74% opted in.
  • Red Rocks Credit Union ($181M, Highlands Ranch, CO) doesn't provide courtesy pay on debit card transactions, but it is looking at ways to attack the situation across its enterprise. Russ Dalke, Red Rocks' CFO, believes early and frequent communication with members drives the response rate to changing regulation. "Continue to communicate to the non-responders," Dalke says. "Success can be measured by the response rate. Remember: A non-response is the same as an 'opt out' in this instance."
  • Texas Dow Employees Credit Union ($1.6B, Lake Jackson, TX) transformed adversity into success, too. The credit union used organizational focus and member-facing behavior to drive the bottom line. Year-over-year for August 2010, overdraft protection income was up 24.6%. For more about TDECU’s strategy, read Attitude, Attitude, Attitude.

Fundamentally, the regulatory shift provided a chance for credit unions to engage members. Take a look at how your credit union managed the upheaval, and let the examples here inspire you to push for a positive outcome.