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CU System
CUNA in media on credit card fees CU difference
MADISON, Wis. (11/10/10)--Mike Schenk, vice president of economics and statistics for the Credit Union National Association (CUNA), was quoted in two media outlets this week regarding bank’s credit card fees, and how credit unions are fundamentally different than banks. In the past, banks were making billions of dollars annually in fees and other charges when they issued credit cards, according to WalletPop (Nov. 8). Consumers often perceived these fees as sneaky hidden or even downright deceptive, which led to recent legislation--including the CARD Act, the Fed’s Regulations Z and other rules prohibiting many bank practices related to credit cards, WalletPop said. “What we’ve seen is with the passage of the CARD Act, essentially a lot of the nuisance fees have disappeared,” Mike Schenk, vice president of economics for the Credit Union National Association, told WalletPop. “Having said that, the issuers still need to make money on the cards they issue. They're thinking of new, creative ways to make up for the legislated losses.” Regarding the credit difference, their structure makes them fundamentally different than banks, Schenk told Yahoo! Finance Tuesday. Credit unions are "fundamentally different from banks because they are not-for-profit and member-owned," Schenk, told Yahoo! Finance. Because credit unions generally are “in the business of maximizing returns to members rather than shareholders,” they can often take operational discounts and offer services at a lower cost than many banks can, Schenk added. Today, those services include free checking. To read the articles, use the links.
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