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News Now

CU System
Cheney to IWash. PostI aSmarterChoice traffic up as banks hike fees
WASHINGTON (10/6/11)--As if someone woke up a sleeping giant, the media, members of Congress and consumers have caught on to the value of credit unions during the debit card fee debate. Credit Union National Association (CUNA) President/CEO Bill Cheney told the Washington Post Tuesday that traffic on its consumer website, aSmarterchoice.org, has jumped eightfold since the news broke that Bank of America would charge a $5 a month debit card fee. "Our point is, if you're upset, you should do something about it," Cheney told the Post. Earlier this week Cheney invited upset bank customers to join a credit union where fees are lower and service is better (News Now Oct. 5). Banks such as BoA, Wells Fargo and Chase plan to charge or are testing new fees to recoup losses they say they will encounter from lost interchange income regulated by the Dodd Frank Act. The public outcry against the fees has prompted response from congressional delegates and the Obama administration, said the Post. U.S. Rep. Brad Miller (D-N.C.) introduced a bill to make it easier to switch accounts and to prohibit banks from assessing fees for the process, and Sen. Richard J. Durbin (D-Ill.), the author of the Dodd Frank amendment that mandates a cap on interchange fees, called for credit unions and community banks to "seize this competitive opportunity" to woo consumers. President Barack Obama also criticized the fee hikes as a way for banks to pad their profits at the expense of consumers, said the Post. Credit unions, the leagues and CUNA are taking full advantage of the opportunity to educate consumers on membership's benefits through mass media, and credit unions are promoting their no-fee and low-fee services. (See related story "CUs, leagues reach out with no-fee promos" in today's System section of News Now.) The news has prompted media reports across the nation about consumers, angry with the escalating bank fees, seeking alternative financial services solutions. Many of them mention switching to credit unions as a key option. Case in point: Tuesday's nationwide newspaper, USA Today, featured an article, "Debit card fees are coming: How to avoid them," with a subhead, "Banks ding shoppers for purchases after law limits transaction fees." In the article, Sandra Block' outlined three ways to avoid debit card fees (pay with cash, pay with credit and switch banks), and wrote: "Small banks and credit unions have historically offered lower fees than the big banks, and that's likely to continue. The law mandating the reduction in debit card fees exempted banks and credit unions with assets of less than $10 billion. Many credit unions allow consumers to open an account for as little as $5." Other media outlets, such as The Oregonian, have "localized" the story, canvassing local credit unions and banks on whether they plan to adopt fees. Credit unions have no plans do adopt fees, according to most of the articles.
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