HARRISBURG, Penn.-One credit union is planning to return $200,000 more to members each month and significantly expand its call center to take advantage of the effects of the new interchange rules.
Starting in October 2011, Pennsylvania State Employees CU will more than triple its foreign ATM surcharge rebate to $20 for qualifying members and in first quarter 2012 will increase call center hours by 37%-adding 30 new hires. Those moves are being made to offer greater convenience at a time when the banks are cutting back services and adding fees as a result of the Durbin rules.
CEO Greg Smith said it is time to take more of the banks' business. "We think this will give us a real point of differentiation between other financial institutions in this state, especially the big banks."
Essentially, the larger foreign ATM surcharge rebate gives members access to 500,000 ATMs nationwide, asserted Smith. "Now members do not have to worry about which ATM is affiliated with which network," said Smith, who believes PSECU will begin seeing existing members and new members bringing over their checking business. "The first thing (consumers) want to know is 'How do I get to my money?' And we have answered that question."
Smith acknowledged the decision to increase the ATM rebate is more important for the $3.8-billion PSECU, which is virtually branchless.
Members previously received a $4 monthly foreign ATM surcharge rebate. Under the new program, members who have a recurring direct deposit of either a payroll or a retirement check get the $20, and others receive an $8 rebate. Smith said the move is aimed at deepening relationships, as well.
Only A Fee, If...
PSECU has not charged its own fees for use of non-proprietary ATMs up to 15 transactions per month, and will keep that policy. After the 15th transaction, the member pays 50 cents per transaction.
Under the old rebate program PSECU typically returned about $240,000 per month to members, Smith said, estimated the changes will add $200,000 to that.
Increasing call center hours by nearly 40%, said Smith, will help serve the faction of members "who don't even open their checkbook until after 5 p.m." PSECU call center hours will soon be extended to 9 p.m. from 5 p.m. Monday through Friday, and to 5 p.m. from noon on Saturday.
Smith is not so sure credit unions below $10 billion will escape interchange cuts; PSECU is projecting a 15% to 20% interchange reduction. "Merchants are merchants and they will look for the least-cost routing. We will plan for the worst and be pleasantly surprised if we are wrong."
Smith added PSECU is projecting it will offset some costs due to new members.
