In a first for a credit union in New Mexico, U.S. Eagle Federal Credit Union said it will drop all overdraft fees for personal and business checking accounts beginning Thursday – which happens to be International Credit Union Day.
During a virtual press conference Wednesday, U.S. Eagle President/CEO Marsha Majors said, “We’re so proud to be among the first of a very small group of financial institutions that are stepping up to do this.”
According to Majors, the Albuquerque-based U.S. Eagle ($1.3 billion in assets, 83,029 members) sees roughly 10,000 to 20,000 of its members each year having to pay some kind of overdraft fee or non-sufficient funds (NSF) fee. Eliminating these fees, which range from $29 to $33 per incident, will result in the credit union losing somewhere between $1.5 million and $3 million each year. However, that does not worry Majors.
“Our focus here, along with our strategy, is really to provide value-added products and services and we believe with our continued focus in that area our other products and services [will] offset this,” she said.
Fee-elimination discussions, according to Majors, had been going on for a long time.
“I’ll say that for some time, it’s been one thing that I’ve considered over several years and as the economy fell into the pandemic, we’ve been there for our members with extensions and waivers of these fees for the last couple of years or the last 19 months. And as a result of that, we thought that, you know, maybe the timing is now right for us to make this change,” Majors said.
Earlier this month, the Pembroke Pines, Fla.-based Power Financial Credit Union eliminated all overdraft and non-sufficient funds fees for members with personal or business accounts. That policy went into effect on Oct. 1.
In August, the $14 billion Chicago-based Alliant Credit Union announced it stopped charging members for overdraft fees or NSFs on all checking and savings accounts. Alliant remains the largest credit union to eliminate those fees.
The Madison, Wis.-based UW Credit Union announced in July that it reduced its overdraft and NSFs from $30 per occurrence to $5. Just last month, the Oklahoma City-based WEOKIE Federal Credit Union reduced its fees from $27.50 per occurrence to $15 per occurrence.
During the virtual press conference, Majors was asked, “What do you think is holding back the industry as a whole from making this leap [to eliminate or reduce fees]?”
Majors responded, “It’s really hard to say, you know? Every credit union or financial institution for that matter, they have their unique strategy; and again, it’s about living your mission in it. And how far do you want to demonstrate that to your membership, and into your communities? So I would hate to speak on behalf of other credit unions or financial institutions, but it aligns with our mission and vision and our brand purpose; and if you focus on that, then I think that ultimately credit unions, in any case, will arrive at this place at some point.”