WASHINGTON-Credit unions still prove they are a better deal than banks. Bank and savings association fees generally are continuing their upward climb and more banks are charging fees for services, according to the Federal Reserve’s Annual Report to the Congress on Retail Fees and Services of Depository Institutions, which surveyed 620 banks and savings associations. Similar data covering credit unions demonstrate that credit unions continue to save consumers the green stuff on their financial services needs. Legislation is currently pending to continue the Federal Reserve’s fee study, which sunsets this year. The bill, H.R. 758, which is primarily aimed at permitting banks to pay interest on business checking accounts, would also include credit union data in the study. Thus far, credit unions have not been included in the annual study and have supported their inclusion. The bill passed the House April 1 and lies waiting for action from the Senate Banking Committee. “What has happened in the Senate, I think, there has just been legislation and other things that have taken their time,” Moebs $ervices, Inc. Chairman Mike Moebs explained. He added that he still feels there is an interest to pass the legislation. Moebs $ervices provides the data to the Fed, while the Fed does its own analysis. Special fees on checking accounts is just one way credit unions continue to outperform banks for their members. As proof, 100% of banks and thrifts (up 0.8% from 2001) charged an average of $18.93 last year for stop payment orders, up from $18.08 in 2001. However, according to similar data from Moebs $ervices, Inc., credit unions charged a median of $10.00 for the same service. The Federal Reserve’s study uses averages, while the Moebs data employs medians, or the middle number in a sequence. Not sufficient funds checks showed the same outcome. Banks’ average NSF fee came to $21.73 in 2002, a full dollar more than the previous year, which the Fed found statistically significant. On the other hand, credit unions’ median charge for the services was $20.00, according to Moebs. Banks out charged credit unions for overdrafts as well. With 100% of banks charging for overdrafts, the average fee increased $1.38 to $21.80 in 2002. Meanwhile, credit unions charged a median of $20.00 for the service. According to Moebs, 37.2% of credit union do not overdraft. By contrast, banks charged $6.88 for deposit items returned, down $0.23 from 2001, while credit unions’ median charge for deposit items returned came to $10.00. ATM fees have gained a great deal of media attention because of local laws attempting to cap or ban them. The number of banks that surcharge for ATM withdrawals increased from 88.5% in 2001 to 89.4% in 2002. The amount of the surcharge also increased $0.04 between 2001 and 2002, from $1.32 to $1.36. While the median surcharge at a credit union-owned ATM was $1.50, only 34.2% of credit unions surcharged at all, according to Moebs’ data. In addition, while 0.4% less banks charged annual fees in 2002, the average charge jumped $1.30 to $11.65 for 2002, the Fed’s data indicated. Banks also increased card fees by an average of $1.88 to $6.39 for 2002 with 4.0%, a 0.5% increase, charging a card fee. Minimums to open various checking/share draft accounts are significantly lower at credit unions than banks. According to the Fed study, the average minimum balance to open a single-balance, single-fee account was $159.21 at a bank in 2002. For credit unions, it was $20.00. Banks’ average monthly fee for these accounts was $7.35, up $0.23 from 2001, which could be avoided by maintaining a minimum balance of nearly $600.00. Credit unions median monthly fee was $5.00 for this type of account. The median minimum to open a fee checking account at a credit union came to $25.00, while banks’ average minimum for a fee-only checking account was $78.41, and increase of $7.10 from 2001. The minimum balance to open a free checking account at a credit union was $1.00 in 2002, while banks asked for a minimum initial deposit of $73.82, still a drop of $12.62 from 2001. According to the Fed, 30.1% of banks and thrifts offered free checking, down 1.8% from 2001. Moebs’ data showed that 76% of credit unions offered free checking. Additionally, less banks are offering negotiable order of withdrawal (NOW) accounts, which pay interest. Some 8.6% fewer banks are offering the single fee account, 2.3% fewer banks are offering the single-fee, single-check-charge accounts, and 2.1% less are providing no-fee NOW accounts. According to the Fed, 1.8% of banks offered no-fee accounts in 2002, while Moebs found that 17.6% of credit unions offered these accounts. In general, as has been in the past, the largest fees and fee hikes tend to be at the largest banks (over $1 billion in assets). [email protected]

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