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The $3.8 billion United Federal Credit Union in St. Joseph, Mich., announced plans to "significantly overhaul" its non-sufficient funds (NSF) and overdraft fees with the elimination of its Overdraft Protection and NSF fees.
According to a statement from United, the fee elimination as well as its Courtesy Pay, which will be reduced from $35 to $20, will go into effect for its more than 180,000 members on April 1.
"Our motivation for eliminating and reducing fees associated with overdraft is simple – it's the right thing to do," United FCU President/CEO Terry O'Rourke said. "These fee changes are consistent with our core value as a credit union of people helping people. Those who rely on courtesy pay are often the ones least able to afford it. We're taking a stance to support our members' financial wellness and provide options that help them avoid fees."
Earlier this month, the $1.9 billion Montgomery, Ala.-based MAX Credit Union similarly announced the elimination of NSFs.
"We understand NSF fees can be punitive and we will not charge members unnecessary fees and penalties," MAX CEO Martin Head stated. "Starting now, if we don't pay your transaction that overdraws your account, you don't pay any fees."
United and MAX were the latest to join a list of nearly a dozen credit unions that have slashed fees for members within the past year. Other credit unions that recently made similar moves included Connexus Credit Union ($3.7 billion, Wausau, Wis.), Westerra Credit Union ($1.9 billion, Denver), CoVantage Credit Union ($2.6 billion, Antigo, Wis.), ESL Federal Credit Union ($8.6 billion, Rochester, N.Y.), Affinity Credit Union ($138 million, Des Moines, Iowa), U.S. Eagle Federal Credit Union ($1.3 billion, Albuquerque, N.M.), Power Financial Credit Union ($926 million, Pembroke Pines, Fla.), Alliant Credit Union ($14.6 billion, Chicago), UW Credit Union ($4.7 billion, Madison, Wis.) and WEOKIE Federal Credit Union ($1.3 billion, Oklahoma City, Okla.).
Nearly two weeks ago, Filene Research Institute in Madison, Wis., conducted in-depth financial analysis and interviews with 16 credit unions for its report, "Overdraft Protection Programs: Credit Union Best Practices" written by its economist, Luis Dopico.
In the report, many of the credit unions felt their programs were either simple but ineffective ("one size fits none") or too complicated for members to understand. Analyzed from a different view, many credit unions are reassessing their programs to get a more nuanced understanding of their members' needs and motivations.
United's O'Rourke said, "We have the tools to help members avoid overdrawing their accounts. We also know that life happens, and when it does, we're here to help with affordable overdraft solutions. We want all of our members to feel welcome and accepted at United with options to meet their unique financial needs."
United stated that more changes and details are in the works in regard to updated overdraft and NSF policies in the months ahead.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
