RALEIGH, N.C. (3/20/12)--State Employees' CU (SECU), based in Raleigh, N.C., has written the Consumer Financial Protection Bureau (CFPB) outlining the credit union's consumer-friendly overdraft practices and mitigation efforts.
The letter, written in response to CFPB's call for comments about overdraft practices in the financial marketplace, highlights the credit union's low-cost and no-cost overdraft options, as well as services provided to help members avoid more than $53 million in overdraft-related fees.
The Credit Union National Association met with CFPB Director Richard Cordray Monday on the issue. He was a speaker at CUNA's Governmental Affairs Conference Monday in Washington D.C. (See related story on his speech in today's News Now, "Cordray says CUs give high-quality services").
SECU's regular overdraft option, used by more than 80% of its 900,000 checking accountholders, protects against high fees associated with "bounced checks." It allows members to select their deposit accounts, open-end loans or credit card to use for automatic transfer of funds if needed to "pay" a checking account item. It debits 50 cents from the protected checking account for the service.
However, SECU members can avoid fees in several ways, SECU said. Members can receive two-way text messaging and alert options on their mobile device or through online Member Access when potential "red flags"--such as low balances--occur on their checking account. Last year, 8.1 million messages and alerts were sent to SECU members.
Also, the credit union's "Another Chance" program provides an alert when an item is posting to a member's checking account without sufficient funds to cover the item. Members have until the end of the business day to make a branch or online deposit to avoid any nonsufficient funds (NSF) fees. This option saved SECU members nearly $2.6 million last year in NSF fees.
SECU also offers "Fee Free Days" where it waives any $12 NSF fees on two separate days in which items marked as NSF are returned, regardless of the number of items. SECU also waives the 50-cent overdraft transfer fees on two days each year.