Overdraft fees at Meriwest Credit Union can take members by surprise if they are unaware there is no limit to the fees.

Meriwest, like many banks, offers standard overdraft protection and several advanced overdraft protection plans. All plans have overdraft fees at Meriwest.

Meriwest’s standard overdraft protection is called Courtesy Pay Overdraft Privilege. Meriwest authorizes and pays overdrafts for checks and other transactions made with your checking account number and automatic bill payments.

Courtesy Pay overdraft protection will not authorize or pay overdrafts for ATM transactions or everyday debit card transactions, however, unless you contact Meriwest’s operational support and explicitly authorize the credit union to do so.

Interestingly, Meriwest’s other overdraft protections include links to either a savings account or line of credit, which its website claims “may be less expensive than our standard overdraft practices.” But explanations of overdraft fees at Meriwest make no promises.

Overdraft Fees at Meriwest Add Up

Each time the credit union covers an overdraft, or a withdrawal with insufficient funds, Meriwest overdraft programs charge the account $35.

Overdraft fees at Meriwest CU have no limit to the number that can be assessed per day. Many other financial institutions set a limit, such as two overdraft fees per day.

According to Pew Charitable Trusts, excessive overdraft fees have become an acceptable practice as financial institutions more than doubled their revenue from fees and service charges between 1984 and 2015.

Consumers are likely to view excessive overdraft fees as a hardship, but these same fees are seen by banks as a way to diversify their sources of revenue. Banks and credit unions felt pressured to find a new source of income as interest rates remained low for many years.

“Income from fees for services has grown considerably over time,” states Pew’s website. “In 1984, fee revenue was small compared with income earned from interest. By 2015, this gap had narrowed substantially.”

Overdraft fees at Meriwest Credit Union are big business, especially with no limit on the number of fees that can be incurred per day.

The Consumer Financial Protection Bureau (CFPB) reports that of all the ways a transaction can be made, debit cards hold the lowest median value, $24, of financial transactions that lead to overdrafts. The median overdraft fee was $34. The CFPB says “such a loan would carry a 17,000 percent annual percentage rate.”

Pew Charitable Trust conducted a national survey that showed 87 percent of people prone to overdraft are somewhat or very concerned about the price they pay for overdraft service. Most would prefer to have a transaction declined than incur a $35 fee.

But it’s no wonder consumers allow overdraft fees to occur. Clever names such as “courtesy overdraft privilege” and “bounce protection” encourage consumers to believe the overdraft coverage is helpful, even desirable.

If you have experienced excessive overdraft fees at Meriwest Credit Union or any other financial institution, you could have a legal claim.

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