Changes are coming soon to the way overdraft protection plans work, and most banks aren’t happy about it. ING Direct is the exception, according to Jim Kelly, ING Direct Chief Operating Officer.

“The regulations are kind of pushing people to get away from the ‘nickel and diming’ aspect of things and really try to deliver straightforward banking services,” Kelly said. “That’s what we’ve always done, so really, we’re pretty happy with the way things are going.

“We’ve built our model to be able to work in that environment.”

ING Direct, the nation’s largest direct bank, launched this week an Online overdraft calculator to make customers more aware of the high cost of overdraft fees. ING Direct, which offers customers an overdraft line of credit instead of charging an overdraft protection fee, launched the calculator at just the right time: With a new law going into effect July 1 forcing banks to ask customers to opt-into potentially expensive overdraft protection fees, the calculator shows why opting in might not be for everyone.

ING Direct: ‘The Market Seems to be Coming to Us’

While many banks had to alter their policies with the change in overdraft protection rules, ING Direct did not.

The bank’s Electric Orange checking account does not charge an overdraft fee. Instead, you are given the choice to opt into an overdraft line of credit. With an overdraft line of credit, you are charged interest on the amount overdrawn from your account. As you can see by using ING Direct’s calculator, a flat-rate overdraft protection fee ends up costing you more than an overdraft line of credit. If you overdraft your account by $100 for 10 days, you will be charged $0.20 ($0.02 per day) compared to the $25 or $30 one-time overdraft fee most banks would assess.

“That’sL $30 for 10 days equates to an interest rate somewhere north of 1000%,” Kelly said. “That doesn’t seem right. The way those transactions get stacked up — in terms of clearing checks, debit card transactions — you get three or four of those for a few dollars and end up paying $100 or $200 in fees in a day or a month.

“That doesn’t seem like the value is in the hands of the consumer. It seems like all the value is going to go to the bank.”

An Emphasis on Customer Service

A recent J.D. Power and Associates study found unhappiness with customer service was consumers’ top reason for changing banks.

In Kelly’s opinion, that statistic bodes well for ING Direct. He said making consumer-friendly moves such as answering calls with live call-takers was not necessary, since ING Direct has done that since the start of the company.

“You’ve got to find a way to reach people with a combination of benefits so they say, ‘Yeah, that’s what I really want — a relationship I want to have with my bank is where it’s on my terms, not the bank’s terms,’” Kelly said. “That’s going to be the differentiator going forward.”

When ING Direct was founded in 1997, it launched as strictly an Internet- and telephone-based service. When customers kept showing up at the bank’s main office to make sure the bank had physical headquarters, the institution decided adding a few customer-accessible locations would be a smart customer service move, according to Kelly.

So ING Direct opened “Cafes” in select locations around the U.S. (Seven cafes currently exist in cities such as Los Angeles, Honolulu and New York City). Each café is exactly what it sounds like: a place that serves bagels, coffee and other snacks. But the ING Direct employees who staff the locations also can help customers open accounts or manage their money.

“We built these spaces to be very hospitable and very welcoming to people that are traveling or just happen to be living or working in the area,” Kelly said.

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