Are We Morphing the Wrong Way?

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Let me make this disclaimer first. I understand the need and often the requirement to change, grow, and expand, even if just enough to gain the benefits of new technologies. That growth has appeared to come with the desire to be more bank-like though, or at least that’s how it seems to me.

Banks are out for profit. We are a non-profit group. Yes, credit unions need to be profitable in order to keep the doors open. Believe me, I preach it all the time coming from a collections background. However, it invites the question: how did we make a profit before fees and charges and why can’t we go back to that and take that burden off the members?

We all know expenses are up for everyone and yet, the fees and charges encumbering members are endlessly increasing, negatively impacting members. This seems to be the opposite of what credit unions are meant to do: assist members and support them in reaching their financial goals.

To prove my point, I researched a very popular credit union to see what kind of fees they had. To my horror, I found a list of 49 separate fees, fees for different activities that are part of the financial institution’s processes, members are now being charged to be completed. This discovery seems to contradict the idea that credit unions are out there to help members, not ding them for money at every opportunity.

If credit unions continue down this road, it may not be long before they become indistinguishable from banks and may lose members all the same. For example, I just left a credit union that was charging me a fee every month simply for having a checking account and a share draft account. That is the kind of product you expect from any financial institution. It is standard, not something you should have to pay an additional cost to have. I thought that went away in the 80s.

It has become all too easy for credit unions to say, “We just need to raise the fees.” It is time for the industry as a whole to start thinking like the founders of the credit union idea, who built our industry on the idea of people helping people, and find a way to profit without burdening the members—or at least, not burdening them as much.

Are we showing off? How many branches do we need? Living away from the city I understand convenience but how many branches are feasible in a 20-mile circle? 22? That is what I am seeing for some credit unions.

We as credit unions need to go back to our roots and remember why we are here in the first place. In that mindset, we’d probably all reach the same conclusion: it is not in our cooperative principles to charge our members for any and all services. Stop leaning on fees to increase profit and seek out alternatives that do less harm to members. Approach the situation as if raising fees is impossible. Take that out of consideration and see what options are left. How do you work with what is left and find a solution?

I expect my credit union boards to be thought-provoking and not just follow what the trend is at any given time. The priority should be to ensure every decision is a benefit to your members. If it isn’t, why do it? Remember the credit union is there because of the members, not the other way around.

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