Reg E: are your customers opting-in? If your marketing efforts have not attained a high opt-in rate among your customers who regularly overdraft, then you had better read this article--and learn what you can still do to boost your opt-in rate.

• Author: Bibb, Jeff

WITH THE PASSING OF THE AUG. 15 DATE for the implementation of Regulation E changes, bank marketers may be inclined to breathe a collective sigh of relief. Compliance departments have completed their bank's due diligence. Letters are out. Posters are up. It's tempting for banks to take their foot off the opt-in accelerator and let their Regulation E guard down.

The early returns are coming in and, as of the deadline, it looks as if banks without proactive Regulation E communications strategies lagged behind those banks that had concerted efforts. In fact, banks with proactive Regulation E communications strategies pulled up to 80 percent response from "known overdraft customers" who chose to opt-in or opt-out (the vast majority opted-in). By comparison, banks with a minimal communications approach had response rates less than half as good.

Whether a bank's results are encouraging or not, communications efforts should continue offering customers opportunities to make their preferred choice. Even if your bank has not yet gotten serious about discussing Regulation E issues with customers, it's not too late--although obviously, the sooner you start, the better.

It's now, post Aug. 15, when customers who neglect balancing checkbooks or monitoring their account balances online could be trying to check out at the grocery store with nothing but a debit card in their wallet. Also, with the holiday shopping season approaching, there is a far greater potential for customers to be short of cash when making purchases. Now is when banks will realize that many of their regulatory notices went unopened or ignored--and customers with the propensity to overdraft may start heating up phone lines and confronting customer service representatives with tales of embarrassment, confusion and inconvenience.

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For banks that took opting-in seriously, the results of their efforts will come to light immediately. The majority of these banks' customers will continue to use their debit cards just as they have in the past.

If nothing else, the sheer number of positive responses can be counted. What's not quite yet evident: Who is opting-in?

Our analysis of consumer overdraft behavior is that prior to Aug. 15, 2010, approximately 70 percent of the banks' checking customers did not overdraft by debit card. Of those customers who opt-in, their overdraft behavior generally falls into three groupings.

1. The "infrequent-to-almost-never overdrafter" makes an occasional...