Archive for the ‘ Fees ’ Category

What’s the difference between a credit union and a bank?


Mature couple enjoying in the park.
They both have money, tellers, ATMs and similar products and services. While all things financial may appear to be quite similar, rest assured there are a few significant differences that set banks and credits unions apart when it comes to how each respective financial institution operates. Where you do your “banking” is your personal choice. We just thought you may like to know the differences between banks and credit unions in the event you’re looking for a financial institution or if you’re not happy where you currently are. Making an informed decision as to where to take your hard-earned money is important for your financial future. Take a look at the differences between banks and credit unions:

Banks:

  • Generate profit for stockholders, Make decisions based on what will give stockholders more profit.
  • They are commercial businesses. They offer services to make a profit.
  • People who buy stock in the bank own shares of the business
  • Serve customers from the general public. Anyone can use a bank.
  • Their Board of Directors are paid a salary. Daily operations are performed by a paid staff.
  • Only people who own stock can vote for the Board of Directors. The customers who use the bank do not have a say.
  • Income is returned to the stockholders in the form of higher dividends on their shares of stock.
  • Like other for-profit businesses, banks must pay taxes to the government.
  • Deposits are federally insured up to $250,00 by the FDIC, a government agency.

Credit Unions:

  • Are not for profit, not for charity, but for service. Without a “profit motive,” they make decisions based on what’s best for their members.
  • Are financial cooperatives. Members pool their savings to provide low-cost loans and low-fee services to each other.
  • Each member is an equal owner regardless of how much money they have on deposit.
  • They exist solely to serve their members. To be eligible to open an account and use the credit union’s services, an individual must meet current membership eligibility requirements within their field of membership per the credit union’s charter.
  • Unpaid volunteers elected from the general credit union membership serve on the Board of Directors and guide the credit union. Daily operations are performed by a paid staff.
  • As owners, members elect fellow members to serve on the Board of Directors.
  • Income or profit is returned to the members in the forms of better savings rates, lower loan rates, and low or no fees for services.
  • Like other not-for-profit institutions, credit unions are exempt from paying federal income tax.
  • Deposits are federally insured up to $250,000 by the National Credit Union Administration, a government agency. The NCUA’s insurance fund is the healthiest of all federal deposit insurance funds.

If you’re looking for a place to do your “banking” and you’re not a member, consider Members 1st Federal Credit Union.

States looking to ban merchants from charging “check out” fees


pink wallet with cards photo

We recently posted information about merchants being able to add surcharge fees on credit card transactions (“Be Aware of Credit Card Surcharges, posted here on 1/10/2013). The following update is reposted with permission from the Pennsylvania Credit Union Association. It originally published in CUNA News Now (February 11, 2013 edition):

MADISON, Wis. (2/11/13)–The Credit Union National Association (CUNA) continues to monitor bills introduced in various states to ban merchants from charging “checkout” surcharge fees on credit card transactions. The state bills now total 11, in addition to two other states said to be drafting similar legislation.

Last week Vermont, Kentucky, Missouri, South Carolina, Utah, and Tennessee introduced bills in their state legislatures to ban the surcharges, and an earlier measure banning surcharges made progress in the New Jersey legislature.

Six other states–Hawaii, Illinois, Mississippi, New Jersey and Rhode Island–had introduced similar bills earlier. Pennsylvania and West Virginia also are said to be drafting similar bills. Since 10 states already have laws on the books banning the fees, if these states’ measures also became law, a total of 23 would have bans.

However, Maine–one of the original 10 states with a surcharge ban already enacted–is considering repealing that law. Last week legislators introduced a bill seeking to repeal its existing surcharge ban.

The flurry of bills are the result of a provision in a $7.2 billion industry court settlement that merchants negotiated with Visa and MasterCard and banks in an antitrust lawsuit. The settlement allows merchants to charge a checkout fee that must be equal to what the merchant pays to accept the card, which is typically 1.5% to 3% in the U.S. and not to exceed 4%. The surcharge provision of the settlement took effect Jan. 27. The surcharge does not affect debit cards.

CUNA is monitoring the developments because any surcharge on credit card transactions would affect all financial institutions, including credit unions, as well as credit union members. Here’s a rundown on last week’s activities:
• Vermont S.B. 87 specifies “a Vermont merchant in any sales transaction shall not impose a surcharge on a person who elects to use a credit card in lieu of payment by cash, check, or similar means,” said the Association of Vermont Credit Unions (Newslines Express Feb. 8). The ban would take effect in July. A bipartisan group introduced the bill: Judiciary Committee Chair Richard Sears (D), Economic Development Committee Chair Kevin Mullin (R), Committee Chair Timothy Ash (D) and Sen. Philip Baruth (D).
• A New Jersey bill making it illegal to impose a surcharge on credit card transactions passed the full Senate Thursday and the Assembly Financial Institutions and Insurance Committee, said the New Jersey Credit Union League (Daily Exchange Feb. 8).
• The new Missouri bill, H.B. 495, would amend state laws to ban surcharges “on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means.” Its sponsor is Rep. Randy Dunn (D-Kansas City).
• Utah S.B. 67, sponsored by Sen. Curtis S. Bramble (R-Provo), does not make the distinction between credit cards and debit cards but “prohibits sellers from imposing a surcharge on a transaction paid for with a financial transaction card.”
• Tennessee’s H.B.0897, sponsored by Rep. Jason Powell (D), prohibits sellers and lessors, as well as “any entity issuing credit or charge cards” from imposing a surcharge on credit card payments.
• News Now also verified state laws prohibiting credit card surcharges have been introduced in Kentucky (HB 256 and HB 259) and in South Carolina (H. 3477), but details were not available.

The 10 states with laws already on the books are: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

Be Aware of Credit Card Surcharges


As a result of a legal settlement to resolve claims brought by a group of U.S. merchants, merchants in the U.S. and U.S. territories may add a surcharge to certain credit card transactions starting after January 27, 2013. This surcharge, also known as a checkout fee, is an additional fee that a merchant can add to your bill of sale when you pay with a credit card. U.S. merchants that surcharge are required to limit the surcharge fees to credit cards only, meaning they cannot surcharge debit and pre-paid cards. They must also limit the amount of the surcharge to the applicable merchant discount rate for the credit card transaction surcharged. A cap of 4% is currently in place, but that may vary. Additionally, companies must disclose the actual dollar amount of this surcharge on every receipt and disclose the fact that they charge a surcharge fee at the point of store entry and at the point of sale. Most likely, you will not see this change until February because of the 30-day notification and registration process that is required.

How will you know if a business is charging the surcharge? Merchants may charge this fee at their discretion. When you’re in a store, look for signs or postings when entering the store and at the cash register that warn you of the merchant’s fee. If you see this notification, consider using your Members 1st Visa Debit Card or a Members 1st Pre-paid VISA instead of your credit card. Unlike credit card transactions, merchants cannot charge any surcharge fees on debit or pre-paid credit card transactions.

If you suspect you’ve been hit with excessive surcharges or that your debit or pre-paid card was charged, visit www.visa.com/checkoutfees and complete a “Report a Merchant Violation Form.” Alleged surcharging will be investigated.

This new law only applies specifically to “credit card” products. Continue to use your VISA Debit Card as CREDIT at the merchant – you want to continue to earn your monthly Swipe 5 cash-back rebate. A debit card is a debit card whether you use it as “debit” or “credit.” If merchants attempt to charge you this fee when you are using your debit card as “credit”, they will be in violation and may be subject to a fine. If anyone has any issues with this moving forward, please report them to our Card Services Group at (800) 283-2328, ext. 6035.

Currently 10 U.S. states have surcharging restrictions including California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas. Consumers who are subjected to checkout fees in states where those fees are prohibited by law may want to discuss this with the retailer or report the retailer to their respective state’s attorney general’s office. Keep in mind that Members 1st is not the entity charging these surcharge fees on your credit card purchases.

For additional information about payments and surcharging: www.visa.com./checkoutfees or call our Card Services Group at (800) 283-2328, ext. 6035.

Get $10 when you refer a friend


Do You Belong?

Bank Transfer Day – Saturday, November 5, 2011
Make the Switch to Members 1st FCU – Receive $10

The big day is coming in less than 24-hours. While any day is the right day to switch to a credit union, thousands of bank customers are expected to take a stand against big bank fees and practices on Saturday, November 5 by taking their money elsewhere.

If you are currently one of our members you can help this movement known as Bank Transfer Day by referring your friends, family, co-workers, or neighbors to Members 1st FCU. If your referral opens an account between November 5 and November 30, 2011, both you and your referral will get $10 each. This small token of our appreciation has big value. You, as a member, already know the benefits of being a credit union member. It’s now time for everyone else to do the same.

How to make a referral:

  1. Download and print this Refer a Friend form
  2. Fill in your contact information and give it to your referral(s)
  3. Your referral simply needs to bring it into any branch when he/she opens their NEW account (current joint owners on any Members 1st account are not eligible to be a referral)

Become one of more than 92 million Americans nationwide who are already enjoying the advantages of credit union membership. Consumers that do make the switch will find that on just about any given day, on average, credit unions offer higher return on most savings, lower rates on most loans, and lower (or no) fees than other financial institutions charge. Not everybody can join any credit union but rest assured there is a credit union for everybody, according to the Pennsylvania Credit Union Association.

For additional information:

Members 1st FCU

(800) 237-7288

Your voice counts in so many ways


The customers of one big name financial institution spoke. Their voice was loud and clear. And that collective voice made the cookie crumble – at least for a while. In case you haven’t heard, Bank of America (BofA), one of the nation’s largest financial institutions (JPMorgan Chase is number one according to a recent article in the New York Times), has decided to abandon its plan to charge its customers a $5 fee to use their debit card for purchases.

Imagine – big business listening to the people who keep it in business. Why the change of plans? Could they not handle the outpouring of complaints? Maybe the looming Bank Transfer Day planned for Saturday, November 5 had something to do with it.  Perhaps Molly Katchpole, the 22-year old from Washington who used Change.org to organize a 300,000+ signature collection platform had a bit of influence. Maybe BofA customers were upset with their bank’s decision to cut thousands of jobs to allegedly save money but yet chose to add yet another fee. One thing is certain, BofA and the others (Wells Fargo, SunTrust, JPMorgan Chase, Regions Financial) will have something else up their sleeve that they’ll spring on their customers once this debit card fee dust settles. You don’t have to be a savvy, degreed financier or Wall Street analyst to know that they’ll have to make up for lost income somehow.

The media – social and mainstream – will let us know in due time. For now, there’s a lesson to be learned here. Don’t ever think your voice doesn’t matter. It does matter. In fact it’s one of the most powerful tool you can use. Remember the old shampoo commercial from the 1970’s? The lady in the commercial told 2 friends about how great the shampoo was. And they told 2 friends. And they told 2 friends. And so on and so on. Good news travels fast. Bad news travels even faster. Fast-forward to 2011 — all you need to do is update your status on Facebook, post on your blog, tweet, text, rant in a YouTube video, or start a grassroots campaign on Change.org and voila, you’ve just told hundreds or thousands within a fraction of time. Your voice becomes the enabler of change.

Your voice can make a huge difference and companies should be willing to listen. Voices indirectly pay their salaries. That’s why at Members 1st we listen.  We make channels available to you to let us know what you want, need, and how you feel about the way we conduct ourselves as a member-0wned organization. Your voice drives what products and services we offer. Your voice drives the changes in how we deliver those products and services. Your voice counts as we lack stockholders but have a volunteer board of directors who come from our membership (if you don’t have an account with us, you can’t be a board member).  Bob Marquette, our President & CEO, strives for nothing less than our delivering to you what he calls an “unparalleled experience” at all times and all of our associates are expected to serve you in that capacity.

Don’t ever think your voice doesn’t matter in business, banking, or any other realm. Someone once said, “If we don’t take care of our customers, someone else will.”  So if your bank isn’t taking care of you, come see us.

Big banks, big fees – not here


Big banks such as Bank of America, Wells Fargo and Chase have either started charging their customers monthly fees to use their debit cards for purchases or are in the testing phases of such. Bank of America is set to charge its customers a $5 monthly fee, according to recent articles in the New York Times and USA Today. Wells Fargo and Chase are testing $3 monthly debit card fees.  Regional banks such as Regional Financial and SunTrust are looking at $4 and $5 monthly debit card fees, respectively.

This new round of debit card fee changes are the result of the Durbin amendment, a critical part of the Dodd-Frank financial overhaul law and is making for hot news across the country. This amendment essentially caps fees that can be charged to a merchant for accepting debit card transactions at the point-of-sale.  As merchants are forced to pay more fees in order to accept debit card transactions at the point-of-sale (i.e., when you type in your PIN), they may try to influence the way in which you conduct your transaction (“Would that be debit or credit? Press X for credit or hit the Y button and type in your PIN.”) How you decide to route your transaction (typing in your PIN or selecting credit) determines behind-the-scenes costs for the merchant. Merchants are charged fees by their financial institution. Banks make money from those merchants from the way in which debit card transactions are routed (determined by your selecting “credit” or typing in your PIN). Those behind-the-scenes costs translate into fees passed on to the consumer (you) so that big banks can make big money (hence those fees mentioned above).

You, as the consumer, have the right to decide how you want your transaction routed when using your debit card. If a merchant attempts to charge you a fee for using your debit card or denies you from using your card based on a specific dollar amount minimum, you need to bring it to someone’s attention wherever you currently do your “banking”. If you are a member of our Credit Union, we encourage you to report this to our Card Services Group.

Our Debit Card Pays You! Our Debit Card offers an exclusive nationally recognized “Swipe 5” benefit. We pay you to use our debit card! For every qualified transaction, you earn 5 cents and receive a monthly rebate based on the total number of qualified transactions. A qualified transaction is one in which you select CREDIT at the point-of-sale and isn’t an ATM or PIN-based transaction. By selecting credit, you benefit from not only earning 5-cents per qualified transaction, but also don’t lose the right of dispute or chargeback in the event there is some sort of problem down the road. You also are protected from fraud when you use your card as “credit” (you are not protected on “debit”/PIN-based transactions).

Our paying you to use our Debit Card is just one of the ways that make credit unions, particularly Members 1st Federal Credit Union, stand out from the pack. If you’re not a member of a credit union, now is a really good time to consider it.

Get your Members 1st Debit Card today and as an added feature, we also offer personalized debit cards. Say goodbye to big banks and big fees and make the switch to a credit union today.

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