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By B. Dan Berger
January 12, 2016

To the editor:

Credit unions have been providing superior, reasonably priced products and services to their members for going on 100 years in the U.S., so I think the assertion made by Martha White (“One Big Perk of Using a Credit Union Just Disappeared,” Jan. 7) about the median overdraft fee found at credit unions vs. banks does a great disservice to credit unions and the more than 102 million American consumers who are credit union members today.

Credit unions, owned and led by their members, have a vested interest in making sure their members know how to get the best value for their dollar. They work every day to make sure their members understand the terms and conditions of the financial products and services that are offered, and they have a strong track record of working closely with their members to resolve any disputes or concerns. This is true particularly in the case of overdraft fees.

This June, we surveyed our own member credit unions on overdraft, and every respondent to that survey said they offer alternatives to overdraft or courtesy pay programs. Some 84% said the most popular of these, among their own members, are overdraft lines of credit and linked savings accounts. And nearly every respondent–97%–will reverse an overdraft charge on a case-by-case basis.

Most of the credit unions in this survey said they make it a practice to contact members who repeatedly incur overdrafts. Additionally, more than 81% provide financial literacy education to their members that specifically focuses on overdraft avoidance. Moreover, any credit union member can opt out of overdraft at any time.

Credit unions know that overdraft exists as a backstop when someone inadvertently draws more on their account than the money they have in it – nothing more, nothing less.

I am proud to lead an organization that serves the interests and needs of the nation’s credit unions, and I unequivocally urge that every American looking for a provider to help them reach their financial goals look to credit unions.

Mr. Berger is the president and CEO of the National Association of Federal Credit Unions.

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Martha White responds: Thanks for your feedback. Credit unions certainly play a valuable role in our financial services ecosystem, and there are many reasons why someone might choose a credit union over a bank — some of which you enumerate in your letter. (As a credit union member myself, I appreciate these contributions on a personal level.) We want to encourage readers to ask questions about the services they receive and the costs they incur from their financial services provider. To your point, many people find the variety of overdraft protection services an institution offers an important factor when choosing where to do their banking. Keeping them apprised of trends such as fee increases can help facilitate
the kind of dialogue that makes them a more informed consumer.

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