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E-Accounts :: Get Toasted :: Roll Out the Rainbow Carpet :: Stop the NSF Insanity

Stop the NSF Insanity

Has this ever happened to you?

Let's say you're at a nice party. Suddenly, it slips out that you work at a credit union. There's a moment of silence, then a rush as everyone tells you a horror story about bouncing one check, then getting hit with an NSF fee that caused another NSF fee, and another, and another...

Does this "NSF Cascade" ever happen to your members? Why are credit unions still doing this to their members?

We dare you to handle cascading NSF situations more humanely. This will require a lot of consultation with your operations and accounting people. Not to mention a shift in thinking. Expect sheer panic from the accountants (Some of that lovely fee income GONE?!? My preciousssssss...)

But is it really worth making an extra $50 or $100 from a member in that one day and then making an enemy for life?

What about a policy that an NSF fee cannot cause another NSF? Or that the same item cannot cause more than one NSF?

Of course, you have overdraft protection, but many members are unable or reluctant to sign up for the line of credit or credit card needed.

Can you limit NSF fees to one per day or week? Is there a way to see an NSF coming and warn the member via telephone or email? Just a few hours notice would be enough many times for the member to transfer funds or make a deposit.

Heck, what about a lower NSF fee? Many CUs have raised NSF fees in recent years to the same levels as banks. Why not bring these fees back down and create another real difference between your CU and the banks?

To be fair, many CUs already have policies in place that allow them to quietly minimize the impacts of NSFs on members in good standing. The challenge is to find ways to turn these often informal "Oops Policies" into market advantages.

Now that checking accounts are pretty much free everywhere, some credit union somewhere is going to make some this last vestige of predatory bank-like behavior and create a real difference. And they are going to gain a lot of rabidly loyal members.

Might as well be you.

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