NORTH HIGHLANDS, Calif. — The CEO of SAFE CU here, which offers members a courtesy pay program, sees the issue of costs on such programs as more complicated than is generally recognized in many media reports.
SAFE CU limits members to a maximum of one ATM or POS courtesy pay fee per day.
"With regard to interchange on debit and credit cards, we believe that the credit union earns the interchange and that is repayment for the service we provide to the merchant and the member," Henry Wirz told Credit Union Journal. "SAFE is currently absorbing a high charge-off rate that the merchant would otherwise bear. SAFE pays the cost of issuing the credit cards, preparing statements and serving the member when the charge-backs and other service is required. We believe that any reduction in interchange will result in new fees that will be passed on to the member. Changing interchange rates will benefit merchants to the detriment of members and their credit union. In the end, the consumer pays for everything."
SAFE members do not have to participate. "If the member does not want courtesy pay we remove that member from the program," said Henry Wirz, president/CEO.
SAFE CU has generated measurably more income in 2009 over 2008 from NSF, courtesy pay, and debit and credit card interchange. Overdraft fees accounted for $434,340; NSF for $1,843,652; courtesy pay for $4,660,862, debit card interchange for $5,280,975, and credit card fees for $1,626,257, for a total of $13,846,086. The CU's total operating income is $93,955,401.
