AUSTIN, Texas–A credit union CEO is calling on his peers to follow his CU’s lead and slash their fees.
“Historically, leaders of financial institutions — myself included — have not done enough to ensure that the communities we serve understand the products and services we offer. This needs to change,” Kendall Garrison, CEO of the $1.485-billion Austin-based Amplify Credit Union, wrote in the Austin Business Journal. “It is why Amplify Credit Union has taken bold steps to better serve our community and members — and it starts with fees.”
Garrison cited 2020 data showing U.S.-based banks and credit unions collectively made $8.82 billion in aggregate fees, which was nearly 6% of total bank profits that year.
“When we crunched the numbers at the end of 2021, we found that the average Amplify member paid three-times as much in fees as they earned in interest,” wrote Garrison. “This showed a clear ethical and moral disconnect for us. If the benchmark of any financial institution is to embrace financial freedom for its customers, then we needed to upend the apple cart when it came to our approach to bank fees.
‘Owe it to Community’
“We owe it to our community to evaluate and change the way we generate revenue to ensure equity and quality service to our members and customers,” Garrison continued. “How did financial institutions become comfortable automatically drafting from the accounts of hard-working Americans to pay for fees that are detrimental to consumers' financial health and often predatory on those who cannot afford to pay them?”
Garrison noted his credit union in February 2022 eliminated every fee at Amplify, sacrificing $2 million in income in the process.
‘Can’t Continue’
“We could not continue to promote a disingenuous brand that is self-serving instead of serving others, and we owned that. Financial institutions can and should make a concerted effort to do what is right. We can address some of the wrongs that have been inherent in how our industry approaches the personal finances of our customers and members,” Garrison stated. “There has never been a more appropriate time to collectively make this switch as we know the financial inequities that fees project on people of color, those with low income and young people. Our communities cannot thrive if we continue to have financial products that perpetuate the cycle of poverty amongst our neighbors.”
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