The Price of Success: $25

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NEW HAVEN, Conn. — At New Haven County CU, success in the realm of non-interest income comes at a price: $25.

CEO James N. Farrell noted that while lending is slowly improving, his credit union has been in the same boat as many others in recent years, faced with the decline in lending volume. But the challenge, he said, was to make up that revenue loss without saddling members with fees. "The biggest thing that helped us was the introduction of the Overdraft Privilege Program," said Farrell. "It allows members to overdraw their accounts, as opposed to having [transactions] sent back NSF, which would cost them more-they'd be charged on our end, and on the other end. With this method, we allow them to overdraw the account and the fee they're overcharged with is less than the fee they'd be charged if the check was sent back."

Farrell emphasized that members are certainly not encouraged to spend beyond their means, but that "it's primarily for them if they're in a bind, to help them out."

As required, members must opt in, but Farrell noted, "Realistically, we don't just give it to everybody. We look at their checking account, and if they have direct deposit, we know the money's going to be coming in. So it helps them out, should they need to access the funds, because we know we're going to be getting their paycheck."

New Haven County CU has 4,400 members and $20-million in assets, and Farrell emphasized that the fees that do exist are designed to be competitive with the banks. "We try to educate our members," he said. "If we see that they're starting to incur [a lot of punitive fees] we'll sit down and say 'You need to manage your finances better' and discuss ways to accomplish that. We don't want to see them spending their money foolishly just because they're not balancing their checkbook and paying close attention."

With the fate of the Durbin Amendment and interchange still uncertain-New Haven County CU also generates approximately $6,000 per month in interchange-Farrell said his community-chartered CU has not yet developed a plan to recoup that potentially lost income, instead focusing on an awareness campaign to lure non-members. "I want to stick to the traditional side of what credit unions are about-being an avenue for saving money and taking out loans at competitive rates. I prefer to go that route in lieu of charging new fees."

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