LOS ANGELES–University Credit Union (UCU) said it has become the first credit union in California to eliminate overdraft fees for its members.
UCU said the move “is aimed to promote greater economic inclusion and equity for all members.”
“The overdraft protection fee is a controversial fee structure that has historically had a negative impact on financially vulnerable members,” said UCU CEO David Tuyo in a statement. “As a not-for-profit financial cooperative, it’s our top priority to give all of our members the financial advantages they need to succeed.”
In the FAQs on its website as part of the announcement of the pricing change, University CU said it will “cover the funds for you up to a certain amount.”
The credit union said it will automatically waive the overdraft fee for checks or ACH transactions that bring an account negative, but enrollment in its overdraft protection program is required to have debit card transactions covered.
Members who exceed the overdraft privilege amount will be changed a $30 insufficient funds fee. Members will have 30 days to pay back the funds that are overdrawn, and will be charged $10 for every 10 days an account is negative.
‘Greatly Benefit Members’
In making its announcement, UCU said the “policy change will greatly benefit members by decreasing financial stress for employees, students, alumni, and other stakeholders in university communities. In addition to UCU’s guarantee to provide loan rates within the top 1% of financial institutions in the country, this is one more example of how UCU is leading the industry towards more equitable treatment of all banking consumers and promoting greater economic inclusion for its members.”
The $1-billion UCU has nearly 50,000 members.
Other CUs Waiving Fees
As CUToday.info reported here, United FCU in Michigan has also just announced elimination of its overdraft and NSF fees. Other credit unions that have eliminated overdraft fees include Alliant Credit Union, Westerra Credit Union, and Power Financial Credit Union.