Support your local credit union ATM network

In the credit union movement we talk a lot about cooperation. Thankfully, we don't just "talk the talk". We also "walk the walk." Perhaps one of the best contemporary examples of this cooperative spirit is found in the very dynamic environment of ATM networking. Cooperation is rarely perfect or as far-reaching as its potential, but in the realm of ATM networking, credit unions have done a pretty good job. Market influences demand that this cooperation continue. ATM surcharging is the most recent catalyst for re-examining the need for support for credit union-owned ATM networks. Debate over ATM surcharge fees has evolved and spread from state legislatures to Congress, and now back to state legislatures and even city councils. As consumer activists try to get government to reign in banks for charging high fees, banks are playing hardball. San Francisco and Santa Monica, California have already passed ordinances to ban surcharge fees. Other cities, large and small, are considering such ordinances. New York, Los Angeles, San Diego, Portland, Oregon, and other cities are talking tough. In response, bankers are rattling their sabers. When the widely publicized surcharge ban took effect in Santa Monica, California, last month, the two largest banks there, Wells Fargo and Bank of America, responded by barring non-customers from using their ATMs. In every market where a state or city is considering a ban, you can be sure that bank lobbyists are pointing out the potential for banks pulling their machines from public access. Representative Maxine Waters (D-Calif.) has sponsored one of the two more prominent ATM ban bills that were introduced in Congress in November of 1999. Rep. Waters predicted that banks will see "legislation and ballot measures all over the country," and that ATM fees are just the beginning. "I think there's going to be a big revolt against fees in general," she said. As banks pull their ATMs out of networks, or posture to do so, consumers certainly get hurt, but what about smaller institutions such as credit unions? Large banks seem to be increasingly content marketing their own ATM networks rather than the shared networks in which they participate. Surcharging has given them an excellent tool for doing so. As banks continue on this track, credit unions need a cooperative response that pools their ATMs and protects credit unions and their members from the ill effects of both surcharging and its potential effects on networks. In 1984 Service Centers Corporation in Southfield, Michigan expanded its efforts to enhance member access and convenience by launching its "SC24" ATM network. Today, the SC24 network serves the members of 210 Michigan credit unions with over 600 ATMs, a network that rivals the 700 ATMs owned by Michigan's largest bank, Comerica. Other credit union-owned ATM networks have formed and flourished around the country. Now more than ever, credit unions need to support their local, credit union-owned ATM network. Credit union leaders also need to continue to encourage interstate alliances between these networks. There are many reasons to support these networks. For instance, SC24, and most of the CU-owned networks offer deposit sharing. Over 12% of SC24's transactions are deposits. The cost of the deposit transaction to the issuer is less than half the cost that would otherwise be paid through direct participation in a regional network. In fact, most regional networks have either eliminated deposit sharing or are considering it because big banks don't want to process deposits because it weakens the value of their own proprietary networks. CU-owned ATM networks such as SC24 offer credit unions greater options for member account flexibility. With SC24, up to 20 different accounts can be accessed for transactions. Regional networks typically have a limit of 3 accounts. Cooperation and support of local, credit union-owned networks also gives credit unions representation with regional and national EFT networks with a collective clout that would otherwise be unattainable. So what should credit unions' response be to the challenges of ATM surcharging? A collective, unified, cooperative response is needed. In Michigan and the Midwest, SC24 created a selective surcharge program for its 210 member credit unions. In cooperation with the Michigan Credit Union League, this was later expanded to include a total of 700 ATMs, 70% of all ATMs owned by Michigan credit unions. And now, in alliance with other organizations such as Corporate One in Ohio, the CU ATM Alliance is expanding to include potentially 3,000 ATMs in the Midwest. Members of these credit unions will have ATM access, if and when big banks pull their ATMs as a result of city ordinances. And, best of all, the transactions will be surcharge-free, an added benefit of being a credit union member. The challenging nature of the current competitive environment will continue to incent credit unions to seek cooperative solutions, as they have done so well in the past. All credit unions should support their local ATM network. A unified front will serve credit unions well in this dynamic ATM marketplace.