Reg E Realities

Reg E ... Everyone's in a panic ... it's the End of fee income as we know it ... all Eyes are on Marketing to make it better.

Sounds like the Y2K scare a bit, huh? My bet is it's probably as credible.

The reality is that Reg E will effect less than 50% of your existing NSF income (debit and ATM only). And the 50% that's at stake, is driven by about 12% of your customer-base.

The trick is to target those heavy overdraft users and make sure they opt-in.

From a communication stand-point you need to:

• Educate: Stick to the basics of: what an overdraft is and what will be different on Aug. 15 than today.
• Motivate: The customer can make an informed decision if you provide examples of how fees will apply and when a card will be declined. Do they want the chance to buy a $30 cup of coffee, or do they want their card declined in the busy grocery line?
• Get a Response: Make it easy. Include a form with self-address and indicia in your customer letter. Make sure your front line staff know your heavy users and are pushing for a response in the branch and when the customer calls in. In the last 2 weeks, divide your heavy user list between your personal bankers and have them make outbound calls (provide a script).

The more heavy-users you can get to opt-in during the next 3 months, the less impact this reg. will have on your institutions bottom line. Come January 1, we'll all look back and wonder what the big hoopla was all about.