HAMPDEN, Maine — As is often the case, it may have been good intentions going in, but that's not what's going to come out of Congress, one person observed.
David Sayers, SVP, finance, account and operations for Maine Savings CU, said he understands why legislators think there are abuses, but said current proposals in Congress will not provide any relief to the consumer.
"It will lead us back to service fees for everyone on all services consumed and cause members to incur greater expenses all around," Sayers said. "Credit unions aren't abusing the consumer - the fees we assess for overdrafts, even at $25 per item, are significantly less than $35 to $40 that the big banks are charging their customers. Limiting these services can only hurt the consumer and place a great burden on financial institutions at a time where we all need more revenue."
At Maine Savings CU, an overdraft privilege program was initiated in May 2007.
"Prior to that time we used to return all overdrafts unpaid and assess an overdraft fee of $25 per item," Sayers said. "We averaged $50,000 per month in income from overdraft fees, which equates to approximately $2 per member. With the privilege program in place our overdraft-related revenues have increased to approximately $125,000 per month - an increase of 150% - which equates to approximately $5 per member."
Sayers noted that part of the reason for the increase is due to having opened two new offices during this time, with a resulting increase in checking accounts.
"But there is no doubt the privilege program is the main contributor," he said. "To put it in perspective, if we didn't have the additional $75,000 in revenues each month, we wouldn't have made any net income during the past two years, and we are a $200-million credit union."
