Comments on: Free Checking Not Dead Yet at Credit Unions

By: Kasasa

Kasasa — Thu, 08 Jul 2010 16:45:12 +0000

Love your pullout quote: “With free checking accounts becoming less prevalent in national banks, credit unions can be an invaluable resource for the average consumer.”

At Kasasa, we’re proud we can offer our accounts for free. And we love all our financial institutions! Thanks for helping to celebrate the news that credit unions and community banks are being recognized for their awesome resources! Go local banking!

By: Editor

Editor — Tue, 29 Jun 2010 01:23:23 +0000

I would recommend preserving the dividends.

By: Martin Reed

Martin Reed — Mon, 28 Jun 2010 23:52:18 +0000

Jeff,

I think it will come down to the choice that a credit union either gives a dividend to it members, or that the free checking account is the dividend they receive, and nothing else.

Credit Unions will need to decide what has bigger impact for them and their membership.

By: Editor

Editor — Fri, 25 Jun 2010 17:25:05 +0000

Thanks for sharing your insights Chuck. I concur.

By: Charles Bruen

Charles Bruen — Thu, 24 Jun 2010 23:50:50 +0000

Jeff, it doesn’t take much of a crystal ball to see where we are headed. Our fee income will have to be replaced and the obvious place to start is the checking account fee. It will be difficult to replace all fee income lost through overdrafts and interchange so we will need to reduce the expense as well as replace the income. A Wall Street Journal article on June 16th reported that Bank of America found that more than half of their checking accounts were unprofitable and cost the bank between $250-$300 per year. I see a scenario in the not too distant future where these things happen:

- New sources of fees are found including substantial monthly fees on most checking accounts
- Reward program, free checks and other benefits are discontinued for unprofitable or marginally profitable accounts
- Unprofitable checking accounts are forced closed

Trying to balance credit union philosophy with the realities of the marketplace we may develop a “lifeline” checking account for those members that truly can’t afford to pay the fees but still need basic access to a checking account.