Making use of its new community charter, the $86 million Framingham Municipal Federal Credit Union in Massachusetts has become Metro-West Community FCU, and as part of the rebranding, it has eliminated checking and internet fees to compete more aggressively with the banks.
That was the message Monday by Metro-West President/CEO John Gallinagh, who said CUs like his should "seek to develop internal efficiencies in the operations area to avoid relying on fee income for growth."
"People everywhere are looking to credit unions as a good alternative," so CUs should shy away from doing anything like added fees that might discourage the trend, he said.
Gallinagh said his market west of Boston in recent months has witnessed an influx of both CU and bank competition. So as a municipal CU with a restricted base, "we know we were inhibited in future growth," prompting the decision last year to seek a community charter from the NCUA. That expanded charter covers 700,000 residents in Middlesex County. Outside of Framingham, Metro-West with 9,000 members has a second office in Natick.
"As you know, municipalities everywhere are cutting back, and so that has been the case in Framingham, which triggered our board's decision to seek a community charter," said Gallinagh.
As part of the fee cutting, Metro-West effective this month eliminated a $1 a month checking fee and $1.95 online bill pay fee.
"These are modest steps," said Gallinagh but they present a counter to moves by Bank of America and other large banks to eliminate free checking in Boston and other cities.
"We feel that we can improve our own internal business model and still offer low loan rates" to make Metro-West a competitive force. The CU has been profitable and has 11% capital, said Gallinagh.
"We will make banking more convenient for members through mobile banking, shared branching and enhanced online services," said Gallinagh adding "we're looking to improve rates on products like credit cards and deposits."