SAN DIEGO–Credit unions in California continue to be hit by negative news coverage following a recent report issued by the state on overdraft fees charged by certain financial institutions.
As CUToday.info first reported here, the report from the Department of Financial Protection and Innovation includes California’s state-chartered CUs, which were required by a new law to annually report the amount of revenue earned from overdraft fees and nonsufficient funds fees, revealing wide ranges in both the percentages of total income the fees represent as well as the dollars collected.
In the wake of the newly released data, credit unions in the state were hit in October with several negative reviews, including in Politico and other publications. That, in turn, led to a response from California and Nevada CU Leagues' CEO Diana Dykstra, which can be found here.
But the critical publicity has not faded. In the last week the state’s credit unions were featured by reporting that also painted CUs in a negative light, including on KPBS News in San Diego, which headlined its coverage, “While leaning into ‘good guy’ image, credit unions charge millions in overdraft fees.”
That report, which featured a member of San Diego County CU complaining about overdraft fees and calling the CU “shitty,” can be viewed and read here.
‘Boasts’ About Community Support
Citing the new California state data, it noted California’s state-chartered CUs collected more than $250 million in OD fees in 2022. Specifically, KPBS said SDCCU collected $18 million in overdraft fees in 2022, about 5% of its total income.
“Many credit unions boast about their commitment to community investment,” KPBS said. “Some even have designations from the federal government for serving low-income populations. But the revenue credit unions generate from overdraft penalties can dwarf the amount of money they invest back into the community.”
The reporting included comments from Bill Birnie, CEO of Frontwave Credit Union, which charges $20 per overdraft, up to five times per day. Birnie told the news outlet the credit union does not price its offering “in a negative way.”
As has other coverage, the KPBS report cites the multi-million-dollar naming rights deals several credit unions have in place with various venues.
Exec Salaries Cited
Meanwhile, a second report on KPBS continues the theme in a report headlined, “San Diego County Credit Union Executives See Big Pay Raises While Customers Pay Millions in Overdraft Fees.”
Again, featuring San Diego County CU, which collected $18 million in overdraft fees in 2022, KPBS cited publicly available financial statements for state-chartered CUs to report SDCCU CEO Teresa Campbell was paid $11.8 million in compensation during 2021, including $1.2-million in base pay, $1.5 million in bonuses and incentives, and $6.8-million in “other reportable compensation.”
The report said other SCCCU execs also received pay increases.
That report can be found here.
Credit Unions Respond
CUToday.info has featured several reports in follow-up to the newly released California data and how it has been received in the market and by the media. Those include:
- ‘In Wake of OD Report, Let’s Not Overreact,’ featuring CUNA economist Mike Schenk.
- ‘The Other Views on Overdraft Report, Criticism,’ featuring viewpoints from NAFCU
- ‘A Response to Critics of CUs and Overdrafts,’ featuring views from Dennis Dollar