MADISON, Wis. (10/14/11)--It has been two weeks since big banks announced plans to charge new or higher debit card fees, unleashing a heavy backlash from consumers and providing a marketing opportunity for credit unions to tout their no debit card fee policies and other benefits of membership. Ditch your bank and join a credit union stories still going strong in the media. In fact, credit unions' efforts to play up the fact that large banks are raising debit card fees while credit unions continue to offer free or low-fee checking have been recognized by a number of press reports. For example:
* A blog on Bankrate.com (Oct. 11) noted that "credit unions aren't wasting any time exploiting the national mood over new checking fees to drive up membership." It quotes a press release from the Credit Union National Association in which CUNA President/CEO urges consumers to "give credit unions a close look and take advantage of credit unions' emphasis on service over profits, typically with fewer and lower fees overall." The blog notes "that bit difference in pricing between big banks and credit unions is already starting to drive up credit union enrollment…." * A Fox News report (Oct. 12) featured consumer reporter Steve Noviello proudly boasting he is a credit union member. He noted credit unions are a better deal, with lower fees, better rates, and an emphasis on serving members, not maximizing profits, and explained that while banks took advantage of the Troubled Asset Relief Program, credit unions didn't--"because they didn't need it." He noted convenience isn't an issue because credit unions have more than 46,000 shared branching locations and many participate in the CO-OP Network for ATMs. He recommended consumers check out credit unions on www.asmarterchoice.org to find a credit union near them because "smart people belong to a credit union." * Forbes (Oct. 11) wrote it is time for consumers to walk the walk and make savvier financial choices. Among its advice: "Switch to a credit union or local bank. Now is the time for credit unions and local banks to court consumers frustrated with big banks." The article noted several credit unions and community banks are increasing debit rewards programs and reaffirming no-fee financial products. "Coastal FCU and Randolph Brooks FCU are essentially paying members cash back to use their debit card," it said, adding, "for consumers fed up with fees, check out your local credit union or community bank." * Fox Business (Oct. 11) said in its "Five Ways to Hang on to Debit Card Rewards" segment that a credit union "may provide the solution for your rewards searching." The National Credit Union Administration (NCUA) told the publication that some credit unions operate debit card rewards programs at a loss because of the demand from their members. "Credit unions are willing to offer products that their members want (and) that do not serve as a revenue generator," said David Small, NCUA spokesman.
Meanwhile, credit unions are adjusting their marketing strategies to make sure they get the word out about their no- or low-fee policies. In The Daily Iowan
Thursday, Jim Kelley, senior vice president of marketing at the University of Iowa Community CU, said the credit union will spend more money on upcoming advertising campaigns to attract potential members. The credit union is stepping up advertising of its free-checking products. "We're spending more money on television, print, direct mail, etc.," he told the newspaper. The credit union does not charge a swipe fee and has no plans to do so. Andrews FCU, Suitland, Md., said it assured members it won't charge debit card fees and stressed its philosophy of "It's Your Money, Your Rule." It also communicated to members that fees are not assessed for monthly debit card use or other commonly used services such as teller transaction, ATM withdrawals and online banking. Member responses, received via e-mail and more than 400 postings to Andrews Federal's Facebook page, "were immediate and overwhelmingly positive," said the credit union. "We felt that it was important to remind members that Andrews Federal provides multiple ways to access their money at no charge," said Chris McDonald, Andrews Federal president/CEO. "Feeing members to access their money is not how we operate." The credit union will continue communications about its lower fees over the next few months and will target these messages to both members and potential members. North Jersey FCU President/CEO Lourdes Cortez told NJBiz.com
(Oct. 11) that consumers' frustrations with big bank fees have brought consumers to her credit union. The credit union attracted 4,000 new members this year, bringing its total membership to 31,000. Credit unions are in a better position to capitalize on banking customer dissatisfaction thanks to a stepped up marketing campaign by credit unions and organizations such as the New Jersey Credit Union League, said Cortez. In the past couple of years the industry has "really gone out there and made an effort to explain the differences (between credit unions and banks), to promote the products and services we offer, and to get involved in financial literacy programs," she told the publication.