Amplify Chief Experience Officer Stacy Armijo spoke at length recently with CU Times about the decision to hide the industry’s overdraft and NSF income.

“If you don't have any insecurity about the way that you make money, you shouldn't be scared to tell people how you make money,” Armijo said.

Of note, in 2022 Amplify became the first full-service financial institution in the country to eliminate all fees for every depositor.

“We still offer overdraft protection to all of the same limits that we always did. We just don't charge for it,” Armijo said. “Because when you charge people to give them money that they don't have, it's called a loan.”

Armijo, who stated she was speaking for the entire Amplify executive team, said the debate she’s heard from those in favor of hiding the fee income reporting misses the point: If you don’t collect overdraft/NSF fee income, the credit union won’t be able to extend it as a service to members. “You absolutely can!”

Amplify’s three years of data found their charge-offs were less than they were when they charged the fee.

“At a root level, I disagree with all of the reasons why our industry claims that it is somehow pro-consumer to charge overdraft fees and NSF fees,” Armijo said. “In what universe does this make sense?”

She continued, “We have figured out a different way to make money. And as a credit union, it matters how you make money and we don't want to make money based on a model that takes money from people who don't have it, and then uses that money to pay interest to people who do. That is how this system works, and it's not an equitable system.”

Armijo said she and her credit union provided input of Amplify's viewpoint on overdraft fees to then NCUA Chair Todd Harper before the reporting rule was created. On March 11, Harper released a lengthy statement condemning Hauptman’s decision, saying the lack of transparency makes credit unions “worse than banks when it comes to fee disclosures.”

Armijo said, “How can we tell people we are the good guys when we are actually making more money from this than banks are? Banks have had to disclose this for a long time. So this is not a new thing. It's only credit unions that haven't had to do it.”

According to NCUA data pulled from Callahan’s Peer Suite, for the full 12 months of 2024, about 450 credit unions with more than $1 billion in assets charged $3.9 billion in overdraft and non-sufficient funds fees, or 6.3% of their net revenue (net interest income plus non-interest income).

They charged $2.6 billion in overdraft, $1.2 billion in NSF and $3.1 billion in other fees.

There was very little change over the four quarters, despite some credit unions jumping into the sample and others falling out because their assets rose above or fell below the $1 billion threshold.

The number above the threshold ranged from 446 in the second quarter to 451 in the fourth quarter.

The number opting out of charging OD or NSF fees started out at 10 and rose to 15 by the fourth quarter.

OD plus NSF fees ranged from 6.2% to 6.4% of net revenue over the four quarters.

Six credit unions started the year charging OD or NSF fees, but stopped by the fourth quarter:

• California Credit Union of San Diego ($3.4 billion in assets, 207,273 members).
• Freedom Credit Union of Warminster, Pa. ($1.4 billion in assets, 64,027 members).
• Greater Nevada Credit Union of Carson City ($1.7 billion in assets, 88,662 members).
• Latino Community Credit Union of Durham, N.C. ($1.1 billion in assets, 144,214 members).
• Rivermark Community Credit Union of Beaverton, Ore. ($3.3 billion in assets, 179,805 members).
• San Francisco Federal Credit Union of San Francisco ($1.3 billion in assets, 50,742 members).

• Alliant Credit Union of Chicago ($19.5 billion in assets, 901,055 members).
• Digital Federal Credit Union of Marlborough, Mass. ($12.6 billion in assets, 1.1 million members).
• CoVantage Credit Union of Antigo, Wis. ($3.7 billion in assets, 171,890 members).
• Self-Help Federal Credit Union of Durham, N.C. ($2.1 billion in assets, 122,852 members).
• Self-Help Credit Union of Durham, N.C. ($2 billion in assets, 89,658 members).
• United States Senate Federal Credit Union of Alexandria, Vs. ($1.5 billion in assets, 61,745 members).
• U.S. Eagle Federal Credit Union of Albuquerque, N.M. ($1.5 billion in assets, 95,243 members).
• Amplify Credit Union of Austin, Texas ($1.3 billion in assets, 49,542 members).
• SelfReliance Federal Credit Union of Chicago, ($1.1 billion in assets, 47,477 members).

In his March 3 statement, Hauptman claimed his reasoning for his decision was to ensure credit unions are able to “support the needs of Americans struggling with inflation,” and America’s Credit Unions President/CEO Jim Nussle praised the decision as something that will “protect institutions from reputational harm” by removing the data from the public eye.

Armijo, and others CU Times spoke with on background, said this move was probably more about protecting the industry’s tax-exempt status.

She said if protecting the tax-exempt status is the priority “then this makes it much more difficult to do that. It really is about this is a threat to the tax exemption for credit unions. Yeah, we should be worried about it. But here's what I think we're doing wrong: We shouldn't then say, ‘Well just don't look over here.’ We should say, ‘Dear credit unions, do you have a business model that actually is accomplishing the mission that it needs to accomplish? And is it future-proofed for the consumer of the future?’ Let's work on that instead of working on ‘Please don't look at that part.’”

Armijo, like Harper and NCUA Board Chair Tanya Otsuka, who also spoke out against Hauptman’s decision, said she believes there is a better way for credit unions to do business and understand that changing the business model is hard work.

“There are a lot of credit unions who are much more reliant on income streams like these than others. But then you’ve got to be honest with yourself about it and say, ‘Maybe that's not a good thing. Maybe we should look at doing things differently.’”

Armijo added, “Instead of sort of rattling off these sort of truisms that our industry has had for a long time, you know ‘people helping people’ and whatnot, how is ‘people helping people’ collecting overdraft income to an extent that a lot of credit unions in the U.S. would not have been profitable, but for their overdraft income? How is a business model that's rooted in that is something that is ‘people helping people’? My disappointment around this is this should have prompted our industry to say, ‘We can do better.’ We can do better and there are ways to do better. But instead it prompted our industry to say, ‘Quit looking at that. That's unfair.’ I would like to know the people who have the energy to do better and to change the business models; because that's how we can actually really live up to the mission.”