Fee Schedules: When Was Your Last Peek?

Credit Union Fee Schedules
(Last Updated On: October 27, 2022)

“Credit unions are different. Our members are the owners, and since we don’t answer to shareholders, we’re able to offer lower rates & fees.” That’s been the siren song of credit unions for generations. Is it still true? And do your target audiences, or even members, care?

Borrowing rates are often lower, that is true. However, studies, including one from Moeb’s, found that many fees were highest at credit unions. Surprised? Take a moment to look at your CU’s current fee schedule. Yes, right now.

Rescheduling Your Fee Schedule

How many fees do you have? For most credit unions, the answer is “too many”. No wonder most credit unions stick the list behind hard-to-find links. Not to mention some which are set punishingly high.

According to NAFCU:

Though the regulation does not require the credit union to post a general fee schedule on its website, credit unions may consider posting a fee schedule to ensure the fees are provided to members when opening an account online and as a member service.  

Ok, so you decided to make it visible. We agree that’s a smart move. Transparency regarding your member’s money is good.

So what’s on that schedule? Probably too many items. Our focus today is on two biggies: OD and NSF. Any plans with those? Other institutions are addressing their overdraft policies. Besides the positive PR, it helps to stay ahead of potential regulations.

With between $15-$30 billion collected annually, much of it from the most financially vulnerable, ensuring your revenues come from non-punitive measures is a good move. Even Filene has called out the need to update overdraft protection policies.

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Too Many Fees?

Here’s a real $1B+ asset size credit union’s Schedule of Fees. They have 52 of them, with more for business clients. Are these contributing, or taking away from, their mission and community-first messaging?

Burdensome fees play against your DEI efforts as well. They also don’t help attract new members. With fintech players keeping it simple and transparent with no fees, it’s hard to stand up for people’s financial well-being while charging for things others don’t.

What can your credit union do?

Review each fee. Some are legacy items, kept around year after year, decade after decade. These might even increase along with inflation and rising operational costs.

But do they actually cost more (or anything) to provide? More importantly, is there any good reason to still charge your members? Especially when options exist which absolutely, certainly, definitely do not.

To Fee or Not To Fee

Thinking Man - To Fee or Not to Fee

As one of the largest basic checking account fintechs, Chime attracts millions of users through their simple platform and lack of nearly all fees. Here’s their fee schedule (as of 10/19/22):

Cash Withdrawal Fee

(applies to both ATM and Over The Counter “OTC” withdrawals) *$2.50 (per transaction) out-of-network ATM withdrawal fee. No fee for transactions at any Allpoint® or Visa® Plus Alliance ATMs, or at MoneyPass® ATMs located in 7 Eleven, Inc. locations. MoneyPass® ATMs not in a 7 Eleven, Inc. location will be subject to fee(s).

That’s it. One fee for using an out-of-network ATM. Their network is 60,000 ATMs strong, by the way.

What about overdrafts? Chime doesn’t charge any overdraft fees and includes a SpotMe service, which provides an immediate $100 “line of credit” to cover negative balances. Users get 15 days to pay it back, with no fees nor interest charges.

(Along with their slick mobile app, this and early paycheck deposits are likely major reasons for their growth.)

Fee Price Comparison

Let’s look at a common overdraft scenario to see how a member would fare under the policies of that credit union mentioned above, and compare costs to a customer of Chime.

  • Member makes a purchase, triggering the $40 overdraft fee
  • Either unaware or with no other options, the member then makes two more purchases that same day

Thus, the overdraft affected subsequent purchases (Sidenote: This is a good time to review your posting order policies.), an issue considering many credit unions allow for up to three overdraft charges per day. Yep, our member now has three $40 overdrafts to cover.

The member paid back the original fee of $40 after 5 days, but that timeframe meant they also triggered an Extended Overdraft Fee of $40. Let’s add it all up, then look at what a similar person using Chime would pay.

Credit Union Member Total Cost

$160: ($40 x 3) + $40

Chime Customer Total Cost


Sure, Chime doesn’t offer as much as your credit union. But they do have checking, credit builder, and savings accounts. Also, you’re right, they’re not member-owned.

But between “owning the institution” and “not paying over $100 for overdraft fees”, which do you think young people choose?

Mission, Fees, & Profitability

Mission & Fees & Profitability

You want to advance financial wellness through credit union services. You’re not alone; most people we talk to have the same goal. Conveniently, that also serves the Cooperative Principles, from education to community improvement and member participation.

So, that raises a question:

Does rethinking fees which negatively affect a minority of members impact your options to deliver services to the majority?

While it’s a great book, we’re in no mood to create any Catch-22’s in your planning. Any steps you take towards greater profitability should also help advance DEI efforts as well as build financial empowerment. But do the numbers add up?

The Moebs $ervices Overdraft Study warns that if the CFPB initiates a ban on overdraft fees, 43.5% of credit unions wouldn’t have sufficient bottom-line net income and soon close. This would cost 90,000 jobs.

Now, obviously, that’s not going to happen. But it is a glimpse into how fee-dependent credit unions have become. So instead of dismissing the findings as industry scare-tactics, what if we took it as a challenge?

To do better by all members, while finding new ways to advance the credit union mission and create revenue streams even members love.

Note: The CFPB is not proposing a complete ban on overdrafts; they’re simply considering a limitation on how many times the fee can be applied.

Many credit unions have their fee income eggs piled up in a single overdraft basket. Whether by regulations, industry pressure, or evolving member expectations, it’s important to ensure revenues come from channels with more longevity and opportunity for growth.

Schedule a Fee Schedule Review

Review of Fee Schedule

Being nickel & dimed is annoying, to me, to you, and to your members. Make a point to review your fee schedule every year.

Pull up your historical data as well as the real cost structure for account management and servicing. Then, ask the following questions for each fee:

  1. How much do we collect each year?
  2. What is the average income and demographic of members who incur this fee? (Ensure you’re not making discriminatory policies, even unintentionally.)
  3. Is it punitive or charging for a valued service?
  4. Can this fee be converted to an included benefit in a premium service?
  5. What is the true cost to provide, given our current technology?

Once you have a clear picture of each fee, you can then project any lost income from changes. This lets you prioritize the most impactful changes first, whether you’re eliminating, reducing, consolidating, or converting fees.

Consider offering perks for your strongest relationships that go beyond fees, with opportunities to add income-generating services.

If you aren’t ready to go the Amplify CU route and eliminate all fees, that’s ok. For financially vulnerable members, simplify. Waive fees for a small number of overdrafts and other actions each month, so long as they remain an active member (direct deposit or debit usage).

Then ensure everyone has an opportunity to get your most valuable services! How can you provide “high-net worth” rewards for members who typically wouldn’t qualify?

Deliver financial wellness and empowerment while creating new and desirable revenue opportunities!

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“Check” In With Value

With checking accounts retaining their position as core to credit union relationships, we believe they should be exciting for members. Value-added (or subscription) checking is one path to growing loyalty and revenue.

By offering a range of lifestyle savings, it’s easy to rationalize any monthly costs (especially compared to a checking account you just pay to have!). A popular example, cell phone damage protection, can save more than the annual price of the account in one claim!

Besides providing value members want, your credit union can shift away from punitive fees, while still growing revenues. You won’t believe the income opportunity, and we know that sounds like click-bait…it’s not!

See how your own members generate revenue…or don’t…and how they could: Set up a quick chat today.

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Joe Winn - CU Geek

Blogger. Speaker. Part-time Jedi.

Focused on helping your bank or credit union grow in the face of emerging challenges.