California’s Wescom Credit Union Ends NSF Fees

In the latest move by a credit union to slash fees for consumers of financial products, Wescom Credit Union ($6.4 billion, Pasadena, Calif.) announced Tuesday that it has eliminated non-sufficient funds (NSF) fees on checking accounts as of Aug. 1, 2024. An NSF fee is charged when there is an insufficient available balance in an account to cover a check or Automated Clearing House (ACH) payment and the item is returned unpaid.

“At Wescom, we believe in doing what is right for our members – they always come first,” Wescom Vice President Deposit Operations Ralph Bautista stated. “With this in mind, we have decided to no longer participate in this outdated and unpopular practice of charging a fee for a transaction that did not create an overdraft balance.”

Wescom said it will continue to offer overdraft options for members who are faced with an emergency expenditure, a deposit that did not occur when expected or an accidental miscalculation of the amount they have available to spend. These members may set up another share account or loan as an overdraft source at no cost; however, a $3 Excessive Withdrawal Fee may be charged to their savings account for each withdrawal or transfer in excess of four within a calendar quarter. Wescom also offers a Courtesy Pay program for a fee.

NSF fees have comprised a small portion of Wescom’s fees so far this year, when the NCUA began including overdraft and NSF fees in Call Reports. They’re also a smaller part of fees compared with the largest credit unions by assets – among the Top 10 credit unions, NSF fees accounted for 30% of total fees in the first half, compared with only 14% at Wescom.

In the first half of 2024, Wescom NSF fees totaled $845,530 of its $6.1 million in total fees and 2.3% of its $36.8 million in non-interest income.

Overdraft fees were more substantial, accounting for 57% of first-half fees, compared with 33% among the Top 10. Wescom charged $3.5 million in overdraft fees in the first six months of this year, more than half of its total fees and 9.4% of its non-interest income. Wescom’s NSF fees rose only 6% from the first quarter to the second quarter, while overdraft and all other fees each rose 22%.

The credit union noted the elimination of NSF fees accompanies its existing benefits of no minimum savings account balance fees and no monthly checking account fees, with the exception of a $5 paper statement fee that is waived upon meeting certain requirements.