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University Credit Union in Los Angeles has eliminated its overdraft fees for all members. According to a statement from the credit union on Wednesday, University CU is the first credit union in California to do so.
University CU ($954.5 million in assets, 46,081 members) stated the reason for the elimination of the overdraft fee for all members was "aimed to promote greater economic inclusion and equity."
"The overdraft protection fee is a controversial fee structure that has historically had a negative impact on financially vulnerable members," Dr. David Tuyo, CEO of University CU, said. "As a not-for-profit financial cooperative, it's our top priority to give all of our members the financial advantages they need to succeed."
According to Wednesday's announcement, the credit union believes this policy shift will decrease financial stress for its members.
More than a dozen other credit unions around the country have announced fee eliminations or reductions over the past seven months.
This week, the $3.8 billion United Federal Credit Union headquartered in St. Joseph, Mich., announced its plans to eliminate overdraft and non-sufficient funds (NSF) fees on April 1.
United FCU President/CEO Terry O'Rourke had similar reasons as University CU for getting rid of the fees. "Our motivation for eliminating and reducing fees associated with overdraft is simple – it's the right thing to do," he said. "These fee changes are consistent with our core value as a credit union of people helping people. Those who rely on courtesy pay are often the ones least able to afford it. We're taking a stance to support our members' financial wellness and provide options that help them avoid fees."
University CU marked at least the third credit union to announce plans for eliminating overdraft and NSF fees so far this year. Besides United FCU's announcement on Tuesday, the $1.9 billion Montgomery, Ala.-based MAX Credit Union announced its fee elimination plans earlier this month.
Last year, CU Times reported on at least nine credit unions that made similar fee-elimination or reduction announcements.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
