A Credit Union on Purpose

Ms. Orem also mentions "…criticism [of our $3 monthly fee] from some who said it wasn't consistent with the credit union movement," but makes no mention of our value proposition and motivations.

More important than the opinions of others is our purpose. We are passionate and committed to the credit union concept of membership and all that it entails – we are, after all, a membership organization that offers financial services. Our business model leverages the advantages of our not-for-profit financial cooperative structure, diversifies and mitigates risk, activates and engages members, and returns value for the benefit of our active and participating members. We fail to see how our approach is inconsistent with the movement.

Value Proposition

Your article mentioned the estimated fee revenue we would collect, but made no mention of the benefits we provide for the relatively low cost of $3 per month. In fact, the cost of the benefits we provide exceeds the fee revenue we collect.

The $3 per month membership dues (i.e. monthly account service fee) is emblematic of our commitment to all things cooperative and provides a partial cost-recovery of the membership benefits (i.e. services) we offer in conjunction with our Everything Account (our combined checking and savings account). The Everything Account offers a competitive interest rate; no requirements for minimum balance, direct deposit or transactions; access to credit reports from the three national bureaus and a calculated credit score every 90 days; full identity theft monitoring and reparation services; discounts to local and national retailers; and many other valuable benefits.

Members opening an Everything Account can expect value in excess of the amount they pay, including receipt of capital surplus distributions (when declared and available) proportionate to their participation. For those that do not see the value of the services highlighted above, they can open a Basic Account that carries no monthly service fee, but provides a vehicle for saving and borrowing with full membership voting rights.

Members are accountable to actively participate with their financial cooperative. Our construction and introduction of membership dues was not a revenue play, but rather a transparent activation and participation tactic deployed to ensure members considered the value of the benefits attached to our Everything Account in relation to the cost of the membership dues (i.e. service fee). The label of membership dues forces a discussion with members and prospective members regarding their commitment to the cooperative. I can't think of anything more consistent with the movement.

Transparency/Disclosures/Compliance

We have been diligent in our communications with members, both on an informal marketing basis and on a formal compliance basis. Our new member onboarding process is heavily focused on discussing mutual expectations and mutual benefits. Monthly account service fees described as membership dues are disclosed as part of our membership agreement.

A Business Model on Purpose

Active and participating members, the value of our services exceeding their cost, and the prospect of a periodic return of surplus capital to the same active and participating members form the basis of our business model. It is a mission-driven business model. Our members and prospective members can make fully informed decisions on whether they want to open an Everything Account with Arizona Federal Credit Union.