To generate revenue, some credit unions are encouraging their members to request cash back when they make debit card purchases at stores rather than withdrawing money from automated teller machines.
The credit unions are trying to offset a special assessment from the National Credit Union Administration to repay funds lost in the subprime mortgage crisis.
When a holder of a debit card gets cash back at the point of sale, the bank or credit union collects interchange fees from the merchant acquirer. By contrast, banks and credit unions pay interchange when their cardholders withdraw cash from another company's ATM.
Last year the NCUA's special assessment was 15 basis points of each federally chartered credit union's insured deposits.
The premium for this year has not been set, but some credit unions are preparing to pay as much as 50 basis points, said Jim Gowan, the president and chief operating officer of Credit Union 24, a Tallahassee, Fla., point of sale and ATM network owned by credit unions.
"The special assessments are putting pressure on credit unions' bottom lines," Gowan said, and credit unions "are taking steps to reduce expenses and increase revenue."