Further, people who maintain lower account balances — living closer to the edge, financially — are much more likely to have missteps that cause overdrafts. When the margin for error is razor-thin, more missteps happen. The logic is compelling; the math, relentless. That's why overdraft fees hit poor folks hardest and most often.

In this sense, overdraft fees comprise an egregious form of discrimination, with a racial component because — thanks largely to systemic issues (Read: Corrupt public policy) — people of color are overrepresented among the poor and almost-poor.

Thus your op-ed is right in both respects: Regarding the harm to lower-income credit union members in particular, and what may be an existential threat to many credit unions.

I only wish you had been able to blue-sky some potential solutions to the “threat” issue. How can credit unions either reduce costs in an already-tough environment while sustaining their competitive value — and/or replace income lost from overdraft fees?

Perhaps “lost” income is a poor choice of words. From a moral/ethical standpoint, it's income that never should have been there in the first place. Yet as you say, many credit union budgets now rely on this toxic income stream. What might replace it?

How can credit unions generate income to sustain their primary financial mission? How can democratically managed or controlled financial service organizations become more sustainable?

Are any credit unions taking creative action in this area? If you haven't already done so, perhaps a CU Times special issue could focus on this daunting challenge and find glints of hope and opportunity. (It always disheartens me when people in any field talk only about cutting, cutting, cutting. Without different thinking, where will breakthroughs come from?)

Could credit unions own small, local businesses that throw off modest income streams, enough to fill the budget gap created by ditching overdraft fees? Are there strengths that credit unions could leverage, such as personal knowledge of members' lives and their businesses? Leverage how? What about radically rethinking how credit unions deliver services? I don't even know what this might mean. I'm merely raising questions that might stir things up in a positive way. Somebody's got to!

Perhaps CU Times could hold a series of virtual or in-person panels, populated with a mix of credit union professionals and outside-the-box thinkers from other walks of life. Think “MIT Forum”-type events.

Regardless, this challenge of income sustainability must be resolved if credit unions are to deliver services without harming the people they are dedicated to helping. Otherwise, how can they continue to justify their cooperative-finance presence in our communities? As I said, a daunting challenge.

Thanks again for a most stimulating and courageous op-ed.

Ira B. Dember

Co-founder

Commonomics USA

Houston