Flushing Bank, a community bank serving New York metro’s area since 1929, recently eliminated overdraft, insufficient funds, and transfer fees on consumer checking accounts for its Flushing Bank, iGObanking and BankPurely customers.
We interviewed John R. Buran, the company’s CEO and president since July 2005, who discussed the reasoning behind the move, the positive response, and more.
Why did your company eliminate overdraft and other checking account-related fees? These last few years have been exceedingly difficult. As a community bank, we have a responsibility to contribute to the economic health and provide support to the individuals and businesses that make up our communities. We provided support throughout the Covid pandemic, yet some are still struggling economically. We wanted to take a leadership role in eliminating fees to offer additional relief while providing tangible value to our loyal customers.
Why do this now as opposed to, let us say, a year ago during the middle of the pandemic? The cumulative effect of the pandemic, the uncertain economy, and recent inflationary pressures have made it more difficult for some to cover their living expenses. We do not want to contribute an added burden by imposing fees on basic banking services.
How are you letting people know about this policy that went into effect on Feb. 16? We kicked off a marketing campaign on Feb. 17 that includes customer communications, public relations, and media advertising.
How are you advertising it? We media including traditional print, out-of-home, and digital elements. Plus we are emailing customers, and have messaging on our website and merchandising materials in our branches.
How long will the campaign run? We plan to continue advertising through the end of March, when we will evaluate its effectiveness. Irrespective of the tenure of the campaign, the decision to eliminate these fees will remain in effect.
What has the response been? Initial response has been positive. We believe that actions like this differentiate us from the competition, and we are optimistic that customers will tell their family and friends, resulting in new customer relationships for us.
How have you gauged that? Are more people opening checking accounts? We are seeing a bit more activity. We are still only a couple of weeks into it. We expect to see more come about. I was at a conference with investors and you would think investors would be much more focused on how much income we’re getting from this, but they were very, very complimentary on Flushing Bank being the first and, to my knowledge, the only community bank that has completely eliminated fees of this type. Not even many large banks have done this. But we wanted to get ahead of everybody, to show our customers that we value their relationships and the fact that consumers will feel comfortable with giving us their money to take care of and giving us the ability to serve them.
Have customers requested this? There has been a lot of concern about overdrafts. If you pay them in a certain order, customers get hit with more fees. If you pay them in another order, customers can get hit with less fees. The flip side is, for example, if you pay the largest amounts that come in the door on any given day first, you naturally will return more of the smaller checks. Conversely, if you pay the smaller checks first and left the larger checks, you might be returning somebody’s mortgage payment, for example, which would be the worst of all worlds. We decided to give our customers peace of mind to know that no matter what, we are not going to charge overdraft fees.
Are there any other new initiatives? We had recently expanded our relationship with a fintech [financial technology] company called Numerated which enables us to offer small businesses a very efficient loan application platform expediting the overall loan origination process. We first used Numerated when we did our Paycheck Protection Program loans during the pandemic as a special Small Business Administration program. We expanded that to incorporate loans up to $500,000. It will be a quicker turnaround that we feel will help support more small businesses in the area. In addition, we recently announced a partnership with NYDIG, another fintech company, offering our customers the ability to buy, sell, and hold bitcoin through our online banking and mobile app. These initiatives are important as we continue building out Flushing Bank as a progressive bank offering a broad array of services providing unique and relevant value to our customers.