MADISON, Wis.—Checking account charges continue to be credit unions’ largest fee producer, accounting for slightly more than 40% of their overall fee revenue—a percentage that is up moderately from two years ago.
That finding is from CUNA’s 2015-2016 CUNA Fees Report, which the trade association released Tuesday.
“Setting fees is a critical task that affects sustainability for credit unions,” shared Jon Haller, CUNA director of corporate and market research. “While credit unions want to be low-fee financial institutions, they depend on fees to cover costs, offer quality products and provide a higher level of service than their competitors. The CUNA Fees Report can help credit unions effectively set fees that provide them the highest competitive advantage.”
Other top-line findings:
- The vast majority (79%) of credit unions that provide checking accounts offer at least one type of free checking account. “A much higher percentage than banks, where only 38% offer free checking, according to Bankrate’s 2014 Checking Survey,” CUNA stated.
- Less than one-half of credit unions’ interest-bearing checking accounts are not free to members.
- The vast majority (75%) of credit unions that don’t offer free interest-bearing checking have provisions allowing accountholders to avoid monthly charges by meeting a minimum-balance requirement. “The same can’t be said for banks,” explained CUNA. “The average credit union’s minimum balance requirement is $969. The average penalty fee for not meeting that requirement is $6.51. Banks, meanwhile, have a staggering $6,211 average minimum balance requirement and an average penalty fee of $14.76, according to Bankrate.”
- Among those credit unions offering debit cards, 15% have rewards programs associated with them.
- The prevalence of rewards programs rises as asset size increases, topping-out at 40% among credit unions with assets of $1 billion or more.
- Only about half (53%) of credit unions that offer debit/ATM cards charge members some sort of transaction fee when using an ATM not owned by the credit union. Forty-two percent of those that will charge a fee first give members a specified number of free transactions each month before assessing any charges. CUNA said that the prevalence of this benefit is on the decline, dropping from 48% in 2012 and 66% in 2010, “marking what is arguably one of the more noteworthy fee-related trends to emerge from the study, beyond the CU-bank comparisons.”
- The median closing costs associated with mortgages is $1,500, with somewhat higher amounts being found in credit unions with assets of $200 million or more.
The report covers fees related to:
- Overdraft protection
- Non-sufficient funds
- Share draft/checking programs
- Online bill payments
- ATM surcharges
- ATM and debit cards
- Credit cards
- First mortgage applications and closing costs
- Member business loan applications
- Mobile banking
- ACH
- eStatements
- Foreign wire transfers