Seeking Its Value Proposition, Ohio CU Dumps 10 Fees

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In a push to rediscover its purpose, Wright-Patt Credit Union, Inc., has eliminated 10 different fees for such services as travelers checks, credit cards, starter checks and account research.

"We really have for the last year and a half been focusing on the value proposition of a cooperative to its members," said Gary Easterling, VP and chief business development officer at WPCU. "With that, we took a look at the philosophy we have for charging fees."

Easterling called the effort "an honest give back. We haven't raised any fees elsewhere to make up for it and we plan to continue to review and reduce even more fees."

The credit union acknowledged it enjoyed a good year financially, but officials say that's not what prompted the move that runs counter to a growing trend among credit unions of charging more fees as spreads narrow.

"Wright-Patt Credit Union is not in the business of maximizing profits for remote shareholders, and so when the finances of the cooperative permit, we are committed to lowering the cost of participation for our member-owners," said CEO Douglas A. Fecher. "We think the elimination of these fees is in contrast to the growing trend of fee increases many consumers are seeing in the for-profit institution marketplace."

To be honest, Easterling said, there were several fees that "didn't make any sense," common in the marketplace just because banks charge them.

"We believe that a lot of credit unions have made the mistake of trying to behave bank-like," Easterling said.

With that has come a lot of fees, some to moderate behavior, others to recover costs. The latter category, he said, includes fees associated with loan payments and NSFs that are necessary. But other fees, he said, such as those associated with credit cards, travelers checks, starter checks and account research, are more of a nuisance than anything.

"As we continue to review our fees, we will ask ourselves whether we are charging the right rate or whether we are just following the marketplace," Easterling said. "There's more that we want to do and I think as we become better able, you will see us reduce even more fees."

Wright-Patt's practice is to charge only those fees necessary to recover the costs of operation or to encourage responsible use of accounts, he said.

Easterling said officials evaluated the financial impact of many fees to determine which it could afford to eliminate. The "nuisance" fees-those that were more of a bother to collect than provide gains-were the first targets. Among those that got the ax was the annual credit card fee.

Easterling said despite the "big three or four credit card providers out there," WPCU is confident that it provides a card that is a good value to its members. "We are toying with the idea of offering a credit card with standard member value and enhanced member value," he said. "It may not compete with others line item by line item, but it'll have fair value."

And, while he said members would still have to pay for bounced checks, they will no longer be charged fees for writing too many checks in a specified time period.

"I know that national trends have said that checks are starting to reduce but we don't see it yet," Easterling said. By the same token, he said, "We are still seeing a growth in the debit card use and I think it's just a matter of time."

Among the other fees cut are those to obtain copies of official credit union checks, remove owners from accounts, receive additional account histories and copy documents.

Easterling said the credit union is using its member newsletter and other collateral to make members aware of the changes in its fee structures.

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