Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CORPUS CHRISTI, Texas – Credit unions across the country were shocked to receive notification from American Express” in late July that the company would begin charging annual fees for participation in the American Express Travelers Cheque program. The fact that fees jumped from nothing to $4,000 in some cases was distressing, but even more, credit unions were upset that they were given only about 30 days to ante up. New annual fees range from $500 to $4,000, depending on a credit union’s annual sales volume of travelers cheques. In the past, credit unions have paid no annual fees for American Express travelers cheque products. For example, a letter to David Brooks, president/CEO of Corpus Christi City ECU signed by Rocco Laterzo, general manager of American Express’ North American Travelers Cheque Group, read: “I urge you to take a few minutes to read this letter thoroughly. After careful consideration, we are making changes that will have an impact on your business and make it necessary for you to take immediate action. This letter serves to notify you that we will soon begin charging an annual fee of $1,000 to cover the costs of producing, distributing, and servicing Travelers Cheque products for our business partners. Enclosed you’ll find a Seller Participation Form permitting American Express to deduct $1,000 from your account for your 2001-2002 fee. It is critical that you complete and return this form no later than August 31, 2001.” The fees are a response to the rising cost of business, according to Gwen Webb, American Express manager of account development in Salt Lake City. American Express customers will receive a heightened level of service in conjunction with the annual fee, Webb said. As examples, she cited a software system that will reduce transaction times and new teller training materials. At least 300 disgruntled credit unions had contacted CUNA about being hit with the fee, asking CUNA to research alternative travelers cheque providers, according to Shirley Mazanet, CUNA product manager. Calls and e-mails from concerned credit unions continue to come in daily, she said. Brooks called the $1,000 annual fee his credit union was being assessed “a dramatic increase.” In July 2001, the $20 million credit union sold $28,000 in travelers cheques. American Express called Jim Warren, president of Houston TX Firefighters FCU, two weeks after he received the notification letter. “The woman was kind of rude. She wanted to know if I had reviewed the letter. When I told her I had briefly skimmed it, she said, `I’ll just fax it over to you.’ She didn’t fax the whole package, just the form to deduct the annual fee..More than the fee, I think her attitude would make me consider changing carriers,” said Warren. Houston Texas Firefighters FCU sold $333,000 in travelers cheques during 2000. American Express set the credit union’s new annual fee at $2,000. “We’re very proud of how we monitor expenses. For our size credit union ($117 million in assets), $2,000 may not be that much money, but we want to know that we’re offering the best program. The short notice given us by American Express gives us no time to evaluate other carriers,” Warren said. Webb of American Express said that credit unions were “surprised” by the annual fee and that they “wished for a longer decision time.” She indicated, however, that competing companies charge annual fees and that American Express fees are reasonable in light of the services provided. “We want our customers to compare apples to apples, to compare the true value of what they are receiving,” she said. Although concerned about credit unions that have opted out of the American Express program, Webb reported that a majority have “definitely” come on board. In response to the large number of credit union concerns expressed, CUNA quickly began researching alternative programs. Using collective bargaining power, CUNA was able to negotiate a deal with Peterborough, England-based provider, Travelex. CUNA anticipated a mid-September roll-out of the Travelex travelers cheque program. The program will allow credit unions to purchase single signature VISA travelers cheques directly from Travelex at 40 cents per $100 pack, with no up-front or annual fees. Duel signature travelers cheques will be available at a higher fee, although the amount had not been set at presstime. Initially, the travelers cheques will be branded with the VISA logo only. Plans are being made to incorporate the “America’s Credit Unions” logo in the near future. As part of the travelers cheque package, Travelex also will offer credit unions “mytravelwallet.com” at no charge. Loaded onto a credit union’s Web site, this software will enable credit union members to get foreign currency, foreign travelers cheques and pre-paid debit cards online. The program also helps members make travel plans, including booking and purchasing hotel, airline and entertainment reservations. “This is a great program, a better alternative. It’s something credit unions should check into,” said Mazanet. -

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times
Live Chat

Copyright © 2022 ALM Media Properties, LLC. All Rights Reserved.