Arizona Membership Dues Decision Highlights Industry Challenges

by Tom Glatt Jr

The word is out that Arizona Federal Credit Union has implemented a $3 per month membership fee. That’s right. Members of AFCU must pay $3 every month to enjoy their member/owner privileges. I have to say I was surprised to hear of their decision, and was curious enough to want to learn more about it and the membership response. My brief search led me to a defined opinion on the AFCU decision, and some rather disconcerting conclusions about the state of credit union member-ownership and consumer knowledge of credit unions.

With regard to the AFCU decision… the credit union calls the $3 charge “membership dues” and not a membership “fee.” For members and general consumers, however, it appears that dues and fees are one and the same. Consider this. The only organization that appears not call this a fee is the credit union itself. Blog commenters, Yelp reviewers, and news outlets all refer to this as a fee. Seems we have a semantics problem.

“Semantics” is often used for denoting a problem of understanding that comes down to word selection or connotation. In its word choice, the credit union seems to be trying to denote something more lofty and important than a common service charge or fee. As a matter of fact, the credit union states in a letter to members regarding its decision that dues “reinforce the idea that we, as members, are all responsible to contribute to our cooperative.”

It seems, however, that some consumers see “dues” as a fee in sheep’s clothing, charged to unsuspecting consumers not as a shared means to contribute to the cooperative spirit, but as a means to fleece them. This brings me to the opinion I formed regarding the AFCU strategy. If the owners of an organization feel they are being unjustly charged, is not that now a fact? Is it then the strategy of the credit union to instill in its ownership the notion that being an owner, and executing ownership rights, is a costly fee-based proposition? I would imagine not, but if perception has become reality for member-owners–if they’ve come to believe that in order to execute ownership rights a fee must be paid–then the strategy reveals a serious unintended consequence.

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