ALBUQUERQUE, N.M.–U.S. Eagle FCU has become the latest credit union to announce it will no longer charge overdraft fees.
During a virtual press conference, CEO Marsha Majors said the CU’s growth is allowing it to make the pricing change.
“I’m extremely proud to say, on behalf of U.S. Eagle, that we are eliminating this painful fee that most people have been powerless to deal with,” Majors said.
Prior to the change, the $1.373-billion U.S. Eagle FCU would allow one withdrawal with insufficient funds before members incurred a fee that Majors said typically was between $29 and $33.
As CUToday.info reported, new research from Bankrate.com has found overdraft fees have hit a new high in 2021 even as more financial institutions announce they have eliminated the fees.
How New Policy Works
According to an explanation to members on the credit union’s website, members without overdraft protection will simply have payments declined when there are insufficient fees in an account. The notice to members cautions that vendors may still charge a fee for a returned payment.
For members with Courtesy Pay, U.S. Eagle said it “may cover your charge up to $500 for members who’ve been with us for five years and up to $1,000 for members who’ve been with us more than five years.”
U.S. Eagle said all accounts in good standing are automatically enrolled in Courtesy Pay after 90 days of a checking account being opened. Members must choose to separately enroll in Courtesy Pay for debit card and ATM transactions. Members have an obligation to bring an account balance current within 45 days “or your membership will be reevaluated,” the credit union said.
The Lost Revenue
Majors said the credit union is projecting the change will cost U.S. Eagle between $1.5 and $2 million in annual revenue, but said the change should be a helpful one to the credit union’s more than 80,000 members.
“We believe that they will be very happy to see that those fees have been eliminated,” she said.
As CUToday.info has reported, other credit unions that have eliminated overdraft fees include Alliant Credit Union, Westerra Credit Union, and Power Financial Credit Union.