The overall structure of credit unions is designed to give customers a much bigger say in how the financial institution is run.

Consumers also tend to be attracted to credit unions for having fewer fees and lower fees than traditional banks.

In fact, credit union customers were reportedly aware that they would probably be charged overdraft fees, but the expectation was that the fees would be significantly lower than what they would encounter at a bank.

According to Bankrate’s 2015 Credit Union Checking Survey, 72 percent of checking accounts at credit unions are free with no minimum balance requirement or monthly maintenance fee. In contrast, only 37 percent of banks offer free checking accounts, with a higher overdraft fee average.

The survey also showed that the average overdraft fee for banks is $33.07, while credit unions charged $26.78 on average for overdraft fees.

Overview of Credit Unions Overdraft Protection

Credit unions sometimes offer different overdraft protection options, which are designed to be of convenience to the customers. For example, Star One Credit Union’s overdraft protection policy states that money from the consumer’s saving account will be transferred to their checking account, but the credit union offers different setups for the overdraft coverage.

One of Star One Credit Union’s options is the Savings Overdraft Coverage, which is advertised to transfer funds in sets of $100 for free until money runs out of the savings account where the money is transferred from.

Another Star One Credit Union option is Credit Line Loan Overdraft Coverage, which automatically links the customer’s loan to his or her account. While there is no cash advance or transfer fee for this service, interest does begin to incur from the date of the advance.

There are more options for overdraft protection on the One Star Credit Union website, while advising consumers to try and avoid falling into overdraft territory to begin with.

In the case of First Technology Federal Credit Union, their website emphasizes the importance of financial management rather than overdraft protection itself.

The First Technology Federal Credit Union website walks customers through opening a checking account, explaining what overdraft protection is, and how to maintain a balanced checking account.

To note, First Technology Federal Credit Union does not disclose its overdraft protection options outright, but consumers who choose this credit union will definitely have that option.

As of Aug. 15, 2010, the federal government prohibits financial institutions from charging consumers overdraft fees unless the consumers opts into the overdraft protection program. If you were charged an overdraft fee by your credit union and did not opt into an overdraft program, legal options may be available to you.

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