While credit unions purportedly work harder for their patrons as not-for-profit cooperative institutions, they may not be above using some of the same misleading overdraft fee practices that for-profit banks have become known for.

Consumer advocates are looking into whether credit union members in the BECU overdraft protection plan may be paying more in fees than they should have to.

What is the Difference Between a Credit Union and a Bank?

As for-profit financial corporations, banks traditionally pass on their profits to investing shareholders. In contrast to this, credit unions take their earnings and turn them into benefits for the whole of their patronage, offering benefits like lower interest rates on loans and higher-paid interest on savings accounts.

What about the individual member enrolled in the BECU overdraft protection plan or plan of another credit union—can he or she still be the victim of the institutions efforts to maximize earnings?

What Does it Mean to Have First Tech Overdraft Protection or a Similar Plan?

When opening an account with a credit union or bank, a customer is almost always given documentation and a sales pitch to “opt-in” for their particular overdraft protection plan.

One of the reasons for this is that banks and credit unions are prohibited by law since mid-August 2010 from charging overdraft fees unless their customers have completed this paperwork and said yes to this coverage.

Once a member opts into overdraft protection, the bank can advance funds or transfer them from a linked savings or money market account to keep the customer from overdrawing the account and going into the red if he or she spends more than they have available.

Unfortunately, this is often done for a fee which has steadily risen to an average of $35 per incident in the last number of years. These overdraft fees are often referred to euphemistically as courtesy pay fees or just non-sufficient fund fees.

Not only are these fees increasing, but financial institutions have derived ways to compound them that often affect the poorest patrons the most. One of these is processing transactions in the order of highest value first rather then chronologically. This allows credit unions to get the member’s account below a zero balance quicker and even charge more fees in a single day.

Are you a member of Boeing Employees Credit Union and enrolled in the BECU overdraft protection program? Are you a member of one of the other credit unions listed and enrolled in their plan? Have you experienced excessive overdraft fees or other deceptive banking practices? You may qualify to join this investigation.