I think it’s fair for State Employees CU of N.C. CEO Jim Blaine to say that courtesy pay is a cash cow for credit unions. Many credit unions do not have the scale and operating efficiencies of competing behemoth financial institutions. In today’s slim margin environment, credit unions have to look for ways to survive financially.

Looking at fees charged for negative member behavior is not an uncommon practice. After all, many abusers of courtesy pay have bad credit and contribute little to the cooperative. That’s right. Members are supposed to contribute something, not just receive free checking and contact the call center with every little problem they have balancing their finances. Members who abuse courtesy pay are the same chronic abusers of NSFs. Some credit unions think it’s appropriate to close the checking account if a member pays too many NSFs. Now isn’t that pushing them out to the payday lenders? I think that we should be encouraging the best practices in offering courtesy pay, including offering free financial counseling to these folks.

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