Coastal Federal Credit Union will be introducing a new overdraft forgiveness program starting this Sunday when the new overdraft regulations go into effect for existing members.
Instead of charging the full $28 overdraft fee when an account is overdrawn, the Raleigh, N.C. credit union will charge one cent per overdraft provided the member corrects the overdraft before 11:00 p.m. that same day or provided that the overdraft does not bring the account balance below $10 at the end of the day.
Marketing Communications Manager Joe Mecca said the idea stemmed from member focus groups the credit union conducted leading up to the regulation changes.
"We asked members about their overdraft habits, and one of the things that came out of the groups was that sometimes members make mistakes and they felt they shouldn't be charged a large fee if they fix the mistake or if it is a small mistake and we agreed," he said.
The new program also helps the credit union cut down on employee time handling phone calls and overdraft fee reversals.
What the credit union will lose on fee income, Mecca said, it hopes to make up in new business by offering a new and unique product to its checking account.