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With banks charging exorbitant fees for just about every transaction made, as well as charging fees for having money just sit in your account, many consumers jumped ship and headed to credit unions.
Credit unions offered the promise of a more personalized banking experience, treating their customers more like family. Credit unions prided themselves on being smaller, more localized and serving their members in the community. They also touted lower fees and loan interest rates.
Within the past several years, however, credit union members have become more disenchanted with what their credit union has to offer. The biggest complaint raised about credit unions is their ever-increasing fees.
What is a Credit Union?
Credit unions are owned by their members and are run democratically, as opposed to corporate banking entities who are focused on profit and answering to stockholders. They are a not-for-profit organization.
There are about 7000 credit unions across the country. They vary greatly in size, services and affiliations. Some require membership in a certain area or field or work, others are based on location, and some are more community based to help give back to community projects.
Overall, in various consumer studies, customers have reported being more satisfied with credit unions because of their service and lower fees.
Of the top 50 wealthiest credit unions, these five are in the top 10 (as numbers 6-10): The Golden 1 Credit Union in Sacramento, CA, Alliant Credit Union, in Chicago, IL, Security Service Federal Credit Union in San Antonio, TX, Star One Credit Union in Sunnyvale, CA and First Technology Federal Credit Union in Mountain View, CA.
Credit Union Fees
Following in the footsteps of traditional banks, credit unions have started new fees or increased their fees in a number of areas, to the distress of their members. These include:
- ATM fees
- Checking or savings account maintenance fees
- NSF (non-sufficient funds) fees
- Miscellaneous fees (i.e. “bad/incorrect address” fees)
- Overdraft fees
Perhaps the most controversial of all fees are those associated with overdrafts.
Essentially, the overdraft protection is a mini loan from the financial institution to secure your purchase; they then provide the service of transferring your money from your savings to your checking account. However, when the average amount the financial institution covers for a day or two is $4 and they charge $25 for the service, they are charging an outrageous interest rate for a very small loan with a very low risk to them. These credit union overdraft fees are at the heart of most complaints.
Credit unions used to have much lower overdraft fees than banks; today, recent surveys show that the average bank overdraft fee is $30, while credit unions are close behind at $28.
Some individuals have proposed legislation that would require that consumers receive notification of an overdraft fee if they are paying with a debit card or are trying to withdraw money using an ATM card.
Credit Union Lawsuit information
Due to questionable financial practices by some institutions, lawsuits have been filed against some credit unions for their failure to adequately disclose their fee structures, as well as other illegal financial practices.
If you have been charged credit union overdraft fees, you may be eligible for legal compensation. Our lawyers can review your situation and guide you toward appropriate action. Consultations are free and confidential.
Join a Free Credit Union Overdraft Fee Class Action Lawsuit Investigation
If you have incurred overdraft fees from a credit union, you may be eligible to participate in a free class action lawsuit investigation.
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