LAS VEGAS-At The Members Group's recent client conference, Credit Union Journal asked credit union executives if they were repricing products given the hits to income from the CARD Act, Reg E and the potential loss of debit interchange fees from the Durbin amendment to the bank bill, and whether all these changes could mean the end of free checking as we know it.
Pia Sachs-Donerkiel, payment services supervisor, New England FCU, Williston, Vt.
We have a project launching this summer to evaluate repricing. I don't think any decision has been made, but all the things that are happening do make you think.
John Benoit, CEO, NorthCountry FCU, South Burlington, Vt.
There is still a need for free checking, although the regulations are discouraging. At our credit union we are going to wait and see how these new regulations impact us and then possibly implement fees and charges. We are not going to make a decision until we have all the information, but we want to be able to give services to our members.
Kitch Trost, VP of human resources and training, and Missy McChesney, card services manager, IH Mississippi Valley CU, Moline, Ill.
We are watching all of these regulations because they could change what we offer, especially interchange. We are being very conscious of our operating costs so we can continue to serve our members. But, we are not going to knee-jerk react. Some of the regulations might not have an impact for many months.
We have a large member base-more than 100,000. We want to make sure we are their primary financial institution and free checking and high-interest checking are sticky products. So we don't want to eliminate those products.
Steve Brandon, chief operations officer, Honda FCU, Torrance, Calif.
We have elected not to offer overdraft on debit cards [prior to the final Congressional vote on the bank reform bill]. At the time of authorization either the account has the money or it does not, and we will approve or decline accordingly. We have a courtesy pay program but will turn that off.
We anticipate we will lose income from these regulations, so we are looking at products as to price changes. For example, we will change our Visa product by increasing rates. Going forward we will have to manage these rates very aggressively as the interest rate environment changes. Also, we are in the process of reexamining every vendor contract. When it is time to renew we are negotiating very aggressively, looking for cost savings.
Bob Hoefer, president and CEO, Dupaco Community CU, Des Moines, Iowa
There are many possibilities, but we have not made any fee changes yet except for our variable rate credit card. We changed the floor and we adjusted the trigger for changing rates. When the prime rate goes up it will trigger increases faster.
On interchange, we took in $1.4 million last year. We will not be changing other fees until we know the full effect of Reg E. We are still a credit union and are going to try to hold our lines the best we can. Of course, everything is open-we will look at all facets of operations, from the expense side to the revenue generators.