Nothing is more disheartening to a member than checking their account balance and finding it in the red. That negative sign before an account balance does something to a person, psychologically. It puts forth the idea that they are an adversary rather than an advocate. The institution that was once lauded as helping people achieve their financial goals is now viewed as a predator. To that end, make sure your members know all of their options when it comes to overdraft protection. This will position you as a trusted partner in their financial affairs.
Three Go-To Overdraft Prevention Products Savings Draft. This should be a standard “go-to pitch” when you are signing up new members with our membership enrollment package. Let members know that tying their checking account to their savings account will save money, should they make an “oops.” And let’s be honest, we all have our “oops” moments. Things slip through the cracks here and there as life flies by like a roller coaster. How many times have you balanced your account to the penny, only to have it go negative three days later because you did not account for that pesky restaurant tip on your debit card? That one event single-handedly sends your account into a death spiral to negative land. If you are laughing, you have been there.
Now, think about your members. If it happens to you it most assuredly happens to them. Tying a checking account to a savings account will prevent a scenario like the one mentioned above. Plus, it furthers the mission of your credit union, which is to serve the financial needs of its members. Keeping them protected from overdrafts should be one of your top priorities.
Line of Credit. Second, make sure you pitch a line of credit as an option. While certain members may not be creditworthy at the time, they can step up from savings account overdraft protection to a line of credit as their score improves. For that matter, they could even use both, in time. This is a great way to position yourself as an advocate, or financial coach, for your credit union member. Make sure to mention the different uses for a line of credit, as well. It can be used for other things too, not just overdraft protection.
Perks. Finally, make sure you mention any perks you offer to your members that might differentiate you from other financial institutions. For instance, if you offer overdraft forgiveness or an overdraft credit for first-time incidents, let them know. This could be the deciding vote that launches them into a financial relationship with you, rather than with a traditional bank.
To facilitate the process, make sure you use our consumer lending package. We have everything included to help you set up a line of credit for your member. If you have other questions about any of our forms packages, call us at (800) 537-9598. We guarantee compliance, and have several different delivery methods to accommodate you. In the meantime, use the tips mentioned here to keep your members’ accounts positive. Do that, and their attitude towards you will be different.
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