Overdraft has always been a valuable service to consumers, even pre-crisis, and it will continue to provide value post-crisis for consumers who need to rely on this protection more than ever. As consumers across the country begin to recover financially, they’ll need overdraft services as a line of defense for when their account doesn’t quite cover purchases or regular household expenses. As a credit union, you have to strike a balance between supporting your member’s short-term liquidity needs while managing the increased risk to your institution.
And the most efficient, strategic way to strike the perfect balance is by using a managed overdraft program. If you are still offering only static, one-size-fits-all overdraft limits (like $500 for all accounts), then your program is essentially unmanaged.
A truly managed overdraft program can dramatically reduce charge-offs and overall risk to your credit union, which is the type of protection that is critical to your credit union’s recovery.
For more information, download our free white paper, Part III of Velocity Solutions’ Credit Union Recovery Series: Why a MANAGED Overdraft Program Matters More Post-Crisis.