Add Iowa to the list of Illinois, New Mexico, Florida, Wisconsin and Oklahoma credit unions that have reduced or eliminated overdraft and insufficient funds (NSF) fees this year .
As of Thursday, Affinity Credit Union ($ 139.7 million in assets, 13,387 members) in Des Moines, Iowa, said as of Nov. 1. card transactions of $ 5 or less. According to the credit union, the reduction and elimination of fees could result in an expected annual loss of income of $ 200,000.
This decision by the credit union made Affinity CU the first credit union in Iowa, and possibly the first financial institution in the state, to reduce or eliminate these fees.
In a statement, Affinity CU CEO Jim Dean said, “Our members shouldn’t have to worry about paying overdraft fees just to buy milk for their child. Proactive fee elimination isn’t what most financial institutions would do, but most financial institutions are not.
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According to Affinity CU, the decision to reduce and eliminate overdraft fees was based on an attempt to help members who are chronically financially struggling and stuck in a cycle of debt. Dean had wanted to make the change since joining in 2018, but technology and programming issues delayed the announcement.
“Excessive fees can lead to prolonged negative account balances, with each fee making it increasingly difficult to escape the debt cycle. These fee adjustments reflect Affinity’s desire to help those who may be struggling to break this cycle, ”the credit union said in a statement.
In an email to CU time, a spokesperson further explained the reasoning behind the fee changes. “Affinity is a designated low income credit union (which will likely receive CDFI status within a few months of first applying this year), and we felt these changes would have a significant impact on the property. -be financial of our members. . We have seen it from a human perspective, as members and consumers ourselves.
“We’ve all had financial problems at some point,” Dean said. “When money is running out, we want our members to be able to put gas in their cars and shop for groceries without having to worry about excessive fees. Fundamentally, this is a decision that was made in the best interests of our members and our community, and not in our own best interest. “
Earlier in October, the US Eagle Federal Credit Union dropped all overdraft fees for personal and business checking accounts.
The Albuquerque-based US Eagle ($ 1.3 billion in assets, 83,029 members) said about 10,000 to 20,000 of its members each year have to pay some sort of overdraft or NSF fee. Eliminating the fees, which range from $ 29 to $ 33 per incident, will cost the credit union between $ 1.5 million and $ 3 million each year.
Other credit unions that have reduced or eliminated fees include:
- As of October 1, the Pembroke Pines, Florida-based company Power Financial Caisse populaire eliminated all overdraft and insufficient funds fees for members with personal or business accounts.
- In September, the Oklahoma City-based company WEOKIE Federal Credit Union reduced its fees from $ 27.50 per event to $ 15 per event.
- In August, the Chicago-based $ 14 billion firm Caisse populaire d’Alliant stopped charging members overdraft fees or NSFs on all checking and savings accounts. Alliant remains the largest credit union to eliminate these fees.
- In July, based in Madison, Wisconsin UW Credit Union reduced his overdraft and NSFs from $ 30 per event to $ 5.
Dean added, “Ultimately our goal is to live out our mission statement of ‘Building a Better Life’ and we’re doing everything in our power to help our members do just that. By reducing fees, we are putting more money in the pockets of our members, helping them care for their families and build wealth for the future.