#2835: University Credit Union Eliminates Overdraft Fees to Promote Financial Inclusion...

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Be sure to watch the entire episode located below the show notes.

Overdraft fees are becoming a thing of the past, as more and more financial institutions nationwide are eliminating these policies to provide a better customer experience and enhance loyalty, as well. Credit unions are right there in the mix and increasing numbers following suit.

In this conversation with University Credit Union President/CEO David Tuyo, David shares why his credit union -- the first in California -- recently eliminated their overdraft fees (Jan. 3, 2022) to promote financial inclusion and equity for all members.

According to research released by the Consumer Financial Protection Bureau (CFPB), revenue from overdraft fees and non-sufficient funds (NSF) fees reached $15.47 billion in 2019. The study also found that less than 9% of consumer accounts account for close to 80% of all overdraft revenue, which highlights the economic disparity of the fee structure for certain consumers.

Furthermore, the CFPB also found that although small institutions with overdraft programs charged lower fees on average, consumer outcomes of those fees were similar to those at larger banks.

David explains that the overdraft protection fee is oftentimes a controversial fee structure that has historically had a negative impact on financially vulnerable members. As a not-for-profit financial cooperative, he says it’s our top priority to give all of our members the financial advantages they need to succeed.”

This 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.

Check it out and let us know your thoughts. And be sure to watch the entire episode below for all the details.