SOURCE: ACTON Marketing, LLC

ACTON Marketing, LLC

March 11, 2010 12:47 ET

ACTON Market Intelligence Reg. E Survey: 57% of U.S. Consumers Would Opt-OUT Today

Consumers Largely Unaware of Their Banks' Current Overdraft Programs

LINCOLN, NE--(Marketwire - March 11, 2010) -  Preliminary findings of a nationwide survey of U.S. banking customers show that if consumers had to decide TODAY, well over half (57%) would OPT-OUT of their bank's NSF overdraft protection program.

Preliminary data, from surveys submitted as recently as this week, show that 57% of consumers feel they don't need overdraft programs and/or don't want to pay the associated bank fees.

These findings confirm that banks and credit unions have a significant consumer education and marketing job to do before July 1, when the first Regulation E changes take effect.

Says Brian Beach, CEO of ACTON Marketing, LLC, "Regulation E doesn't need to result in banks and credit unions having to take a huge hit in NSF fees. In fact, savvy financial marketers could actually increase their companies' NSF fees by capturing the customers lost by banks that aren't handling it right."

According to preliminary study findings, only 28% of bank customers in America said they were "absolutely certain" about their financial institution's NSF overdraft program, its fees and structure. Twenty-two percent (22%) cited they "didn't have a clue" about their financial institution's NSF overdraft program. The study shows that over half the banking customers in America lack significant understanding with regard to the overdraft program currently offered by their bank or credit union. Continued Beach, "Banks and credit unions should be certain they have at least three legs supporting their NSF stool. First, they should design their overdraft programs in line with what their customers want and need. Do the research. Pay attention to studies like ours. Certainly find out what their customers will accept, but also see what they really need. Next, financial institutions should educate their customers about their NSF overdraft programs. It's clear from our survey, bank customers are largely unaware of the overdraft programs now offered by their banks or credit unions. Finally, the institutions must employ Opportunity Marketing. They need to know the elasticity of their NSF fees, how to market for a great response, how to structure those fees for optimal opt-in. Simply, how to do it right."

The new Regulation E requirements say all financial institutions must inform their customers about their NSF overdraft protection program and give customers the option to accept or decline the program's coverage for debit card transactions and ATM withdrawals. Otherwise, no NSF fees can be assessed for those insufficient fund transactions. (Reg. E does not affect paper checks and automatic transactions.) The most recent ACTON Market Intelligence study shows 75% of American households have and use a debit card.

Says Beach, "Because of Regulation E, banks and credit unions do not have the luxury of business-as-usual approaches to their overdraft programs. They may have been regulated into a corner, but they're not necessarily trapped there. They can educate and market their way out of the Regulation E corner."

ACTON Market Intelligence is a wholly-owned division of ACTON Marketing, LLC, Lincoln, Nebraska. ACTON Marketing is a full-service direct marketing organization that provides complete direct mail programs for financial organizations pursuing new account growth. ACTON Marketing was the first marketing company to promote free checking. Using decades of proprietary data, knowledge, and experience, ACTON Marketing continues to offer successful strategies, creative, and production services to clients nationwide. Besides its Checking Account Customer Acquisition program and its new Opt-in and NSF marketing programs, ACTON offers strategies for New Movers marketing, pre-approved auto loans, CD retention, cross-selling and more. To learn more visit actonfs.com.

©2010 ACTON Marketing, LLC, 3401 NW 39th Street, Lincoln, NE 68524-2208

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