UW Credit Union branch.
Credit/UW Credit Union
Nearly three years ago, the Madison, Wis.-based UW Credit Union ($5.3 billion in assets, 348,036 members) cut its overdraft (OD) and nonsufficient funds (NSF) fees from $30 per occurrence to $5. It was one of the first credit unions in the country to announce such changes and numerous credit unions followed with similar cuts or reductions in fees.
On Monday, UW Credit Union officials announced a new series of fee eliminations that are part of a two-pronged approach: Creating more accessible and equitable banking and a longer-term strategic approach to simplifying the credit union's fee schedules and account offerings.
The policy shift announcement in 2021 was similarly reasoned to align the credit union's goal of creating a more equitable banking experience for everyone, while also supporting the financially vulnerable.
According to UW Credit Union, as of April 1, its members will no longer be charged the following fees:
- NSF for declined checks and Automated Clearing House (ACH) debits on all checking and savings accounts.
- Overdrafts related to recurring debit card transactions on all checking accounts.
- Returned checks for credit card payments.
CU Times spoke with UW Credit Union Vice President of Research and Product Strategy Chad LaFlash about the fee changes. He explained the move to drop these fees was a natural progression for the credit union's long-term vision.
"We've prided ourselves over the years in not relying too heavily on penalty fee income and especially overdraft and NSF income," LaFlash said. "I think we're in the second or third percentile in some of the national benchmarking studies about fee income from those sources. And so this $5 fee maximum per day, one per day, has been in place for a while now and has kept our overall income very low, and NSFs are only a portion of that income. But still, despite that, given our size, we're talking a six figure hit to the bottom line with this change – with this one change."
Chad LaFlash LaFlash added, "It's also an attempt, a long-term attempt for us to sort of simplify our fee schedules and our account offerings and make it as easy for people as possible to manage how they'd like to."
LaFlash said there are other plans in the works for future announcements, but he could not go into specifics at this time other than to say the credit union is "gearing up to do some additional simplification of our account offerings over the coming year."
As part of the simplification of its fee schedules, Monday's announcement was also a fix to remove some marketing confusion about its fees. "But it also kind of kept us from saying, 'Oh we have no overdraft fees on our debit card' and we always had to have an asterisk that said, 'Unless it's a recurring payment.' And now we've just gotten rid of that asterisk and the confusion around it to say, 'We no longer charge for that either, and there's no such thing as an overdraft fee related to debit card transactions.'"
LaFlash added, "We do intend to keep marching forward in the benefit of consumers and in the eyesight of eliminating or reducing as many fees as possible."
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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.
