Fee less, earn more

Overdraft and other checking account charges account for nearly half of credit unions’ fee income, according to the CUNA Fees Report. Credit unions are a better deal than banks: The average credit union courtesy-pay fee is $27.24 vs. $33.04 for banks.

For credit unions looking to differentiate themselves from their competitors through the elimination of fees, industry experts offer this advice:

Eliminate fees that have no value. “Providing convenient, short-term financial assistance has value,” says Richard Miller, executive vice president at John M. Floyd & Associates, a financial services consulting firm and CUNA Strategic Services alliance provider. “If you’re not offering that help, someone else will. The result is the member will pay a fee to an outside provider instead of the credit union.”

Educate members about your overdraft programs and the opt-in process required by Regulation E. “Make sure your members understand the pros and cons of opting in under Regulation E, including the benefit it provides when they need to make a purchase and are short of funds in their checking account,” Miller says. “If you haven’t, you’re likely missing out on potential income from members who want to use the service.”

 

continue reading »