TULLAHOMA, Tenn. — Ascend Federal Credit Union recently receivednational media attention when a frustrated Bank of America creditcard holder closed her account.
Miriam Majors, a nurse, was featured on a Dec. 16 segment on theCBS Evening News. Bank of America had raised her credit card ratefrom 7.99% to 28.99% because it noticed that Majors' credit limiton another card had had been slashed from $23,000 to $15,900 andher credit score had dropped 50 points, said CBS reporter MarkStrassmann. The practice is called “balance chasing” and banksworried about their own rising loan defaults are decreasing creditlimits for customers who don't pay their balances off each month,he said.
Majors, who shops at Goodwill and “always pays her bills on time,”closed the Bank of America credit card and opened a new one at $1.1billion Ascend FCU “where cardholders have a voice in making therules,” Strassmann reported.
In a statement to CBS, Bank of America said it could not comment ona specific customer's account but that it is taking “a moreaggressive look at credit cards in the current environment.”
Ascend President/CEO Caren Gabriel said Majors' move to the CUhelps reinforce the movement's message of differentiation.
“It goes along with our brand promise of educating members so thatthey become better financial stewards,” Gabriel said. “We want tolisten to their needs and not just sell them a product.”
Gabriel said the credit union has seen an increase in the number ofpeople coming to Ascend to open savings accounts and inquiries fromseveral members on lending safety and soundness. On Dec. 1, itdistributed an $8 million bonus dividend to its members.
“On the savings side, people say they're coming to us because theyfeel comfortable with us. I'm not only proud for Ascend but for thewhole movement,” Gabriel said of the CBS Evening Newsmention.
After CBS visited the credit union several weeks ago, Gabriel saidstaffers kept checking the network's Web site to see when thesegment would air. “We almost thought they weren't going to airit,” she said.
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