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Credit unions play up free checking

By Claes Bell, CFA · Bankrate.com
Tuesday, October 11, 2011
Posted: 12 pm ET

Credit unions aren't wasting any time exploiting the national mood over new checking fees to drive up membership. Last week the Credit Union National Association, an industry trade group, put out a press release touting credit unions' free checking offerings. From the release:

"We want consumers to know they can fight back against big banks by saying no to more fees.  They should give credit unions a close look and take advantage of credit unions’ emphasis on service over profits, typically with fewer and lower fees overall," said (CUNA president and CEO Bill Cheney).

"When free  checking at banks seems to be disappearing, our surveys show 8 out of 10 credit unions still offer at least one free checking account with no minimum balance requirement and no maintenance or activity fees," Cheney added.

That big difference in pricing between big banks and credit unions is already starting to drive up credit union enrollment, as my co-blogger David McMillin noted last week.

I hope credit unions are able to deliver on their promise of keeping overall checking fees low going forward. Back in January, CUNA released a survey that found 91 percent of credit unions anticipated making some change to their rates, fees or services as a result of the Durbin amendment.

In fact, according to that survey, 41 percent of credit unions were considering raising debit/check card fees as a result of the limits on what financial institutions can charge merchants for processing debit card transactions. And those responses came even as it was already locked in that most credit unions and community banks were going to be excluded from such limits through the $10-billion-in-assets-or-less exemption provided for in the law.

In several interviews for radio, print and TV in the last couple of weeks, I've been touting credit unions as an alternative to big banks and a place where free checking will live on. I hope that turns out to be the case, and those credit unions that were planning on raising checking fees have reconsidered now that they've seen how powerful a marketing tool it can be. After all, I'd hate to see all those folks who left their old banks seeking free checking get burned by debit and checking account fees at their new credit unions.

What do you think? Will credit unions jump on the debit-card-fee bandwagon? Or will credit union checking stay largely free?

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2 Comments
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October 24, 2011 at 2:13 pm

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Bill McDermott
October 12, 2011 at 6:41 pm

Since credit unions exist for the benefit of the depositors. Unlikely, they will jump on the fee bandwagon.