ATLANTA -- Breaking ranks, officials of about 50 defense-related credit unions opposed letting automated teller machine owners impose surcharges on cash dispensers located on military bases.
The officials were gathered here for the Defense Credit Union Summit, part of the National Association of Federal Credit Unions annual conference.
Their position runs counter to a May 20 unanimous decision by the Armed Forces Financial Network Board to permit such on-base surcharges. Before, surcharges were not allowed.
AFFN is an. international ATM and point-of-sale network with facilities on or near military bases. Its six-member board includes three bank and three credit union representatives. There are about 300 defense-related credit unions.
Tom Hughes, president and chief executive officer of Navy Federal Credit Union, urged credit union officials to protest the board's decision. He asked roughly 120 credit union officers representing 54 credit unions if they oppose the network board's decision. All but one hand went up.
Some credit union customers might go to banks to avoid paying the surcharges, Mr. Hughes said. That could jeopardize the customer's relationship with the credit union.
"The nefarious thing in the whole deal is banks own ATMs," he said. "And banks don't charge their customers surcharges - they charge non-customers."
Ken Kittock, director of information services for Navy Federal, said the surcharges are unfair because there's often nowhere else to go for on-base personnel who need money. In many cases, only one bank and one credit union-can have an on-base ATM.
"There's no competition and there's no other choice," he said.
Also, the surcharges are unfair because they aren't disclosed until the person needs cash.
In emergencies "you're in a situation where you're probably going to have' to pay the surcharge," he said.
Frustrated credit union customers might blame the credit union for the charge, he said.
Surcharges also could invite congressional and regulatory scrutiny, particularly now that Rep. Joseph P. Kennedy 2d has held hearings about fees charged by banks and credit unions.