It's not just the big banks that are getting rid of fees that aggravate customers.
Affinity Plus Federal Credit Union, the third-largest credit union in Minnesota, is doing away with the $35 non-sufficient funds fee it charged when payments are returned, including when checks bounce. It also is cutting its overdraft fee from $35 to $15 and will waive the fee when the negative balance is less than $100.
CEO Dave Larson said Tuesday that he thinks Affinity Plus is the first credit union in the state to make such moves.
"We feel this really aligns with who we serve and with who we are as an organization," he said, noting that Affinity Plus is a not-for-profit financial cooperative owned by its members.
In recent months, several financial institutions, including Minneapolis-based U.S. Bank, Wells Fargo, Bank of America and Citibank, have announced similar changes to overdraft and non-sufficient fees — either ditching them or rolling them back. They've been under pressure to do so from policymakers and consumer advocates who have criticized them for making money from the financial struggles of cash-strapped families.
Larson said Affinity Plus started thinking about the issue seriously after it waived fees for a couple months in the spring of 2020 to help members at the beginning of the pandemic. It ended up forgoing about 45,000 fees that year.
That decision was well received by members and employees, sparking a larger conversation with its board about the fees, he said. It became a strategic priority for the credit union this year.
"At our June board meeting, we presented this idea to the board," Larson said. "They were fully in support of it."
The changes, which are expected to reduce fees paid at Affinity Plus by 63%, took effect at the end of June.
The credit union estimates it will result in $5 million less in fees over the next three years. That amounts to less than 10% of its annual income, Larson said.
He said he hopes the changes will lead to more member engagement — and attract new members to the credit union. And he said he thinks employees will be proud of the change, too, helping in its recruiting efforts.
"I think they'll be excited to talk to new members about this as it relates to joining Affinity Plus," Larson said.
Affinity Plus has about 240,000 members and 30 branches.
