UW Credit Union reduces all overdraft fees to $ 5

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New, streamlined policy aims to create a fairer bank while supporting financially vulnerable people

Effective Tuesday, July 13, UW Credit Union will reduce its overdraft (OD) and insufficient funds (NSF) charges by more than 80%, from $ 30 per event to $ 5. The simplified policy creates a significant reduction for members and supports national changes designed to create more equitable banking services.

Average NSF / OD fees in the United States were over $ 33 in 2020, up from $ 30 in 2010, according to Bankrate.com. UW Credit Union‘s new low industry fees apply to all of its accounts, including checking, savings and money market transactions. UW Credit Union will continue to provide a threshold of (-) $ 10, below which no fees will be charged, as well as limit fees to a maximum of one per day. UW Credit Union eliminated overdraft fees associated with daily debit card purchases and ATM withdrawals in 2010. These practices remain rare at most financial institutions.

While the annual number of NSF / OD fees charged by UW Credit Union is low by industry standards, 8% of its 300,000 members pay one or more NSF / OD fees per year, with an average of nearly four fees per year. The new policy could save these members about $ 100 per year. For some, the actual amount will be much higher.

“Everyone’s short sometimes,” said UW Credit Union President and CEO Paul Kundert. “From a student managing their first bank account to families losing track of their current balance, our goal for all members is to help them build wealth, not erode it. While certain fees are necessary to discourage behavior that could harm local businesses and other members, they should be reasonable and enforced fairly. “

According to The FinHealth Spend Report 2021, low-to-moderate income (LMI) households are almost twice as likely to overdraft as households without LMI.

“Harsh penalties are part of the reason why so many members of the community are either unbanked or underbanked,” said Constance Alberts, program manager for Bank On Greater Milwaukee. “Changes to the overdraft policy that include significant fee reductions or the elimination of fees can make a big difference. Equally important is that financial institutions work as partners to their members, providing real-time support and guarantees to avoid fees in the first place. People need more transparency, more resources and more points of contact to help them take better ownership of their finances. “

With industry overdraft income reaching $ 31 billion, according to financial data firm Moebs Services Inc., the reduction in that income is long overdue. Concrete fee prevention efforts can help reinforce these policy changes. UW Credit Union members can set up automatic alerts to notify them when a specified account drops below a specified balance or when a transaction greater than a specified amount clears an account. Alerts are free, immediate and easily modifiable at any time. The Credit Union also offers a variety of in-person and virtual financial events to help people develop budgeting skills, track personal expenses, and set realistic financial goals. The events are free and open to the public.

UW Credit Union’s substantial fee reduction strengthens its pro-consumer stance on sustainable banking services. In 2018, the credit union introduced its Clear, Launch, and Encore accounts for people who prefer not to have overdraft fees. All transactions that may result in an overdraft are returned unpaid, free of charge. Today, 25-30% of all new accounts opened belong to one of these types of accounts.

To learn more about the recent rate reduction, visit https://www.uwcu.org/checking/overdrafts/.

About UW Credit Union

UW Credit Union is a growing, federally insured financial institution and a leading provider of a full range of financial services to the communities of the University of Wisconsin. UW Credit Union’s more than 800 employees serve the financial needs of more than 300,000 members through world-class technology systems and through a convenient network of 29 branches and over 100 ATMs. With assets in excess of $ 4.6 billion, UW Credit Union is nationally ranked as a major credit union. Founded 90 years ago by faculty and staff at the University of Wisconsin, UW Credit Union continues to operate as a non-profit, member-owned financial cooperative with locations in Madison, Milwaukee, Stevens Point , Green Bay, Oshkosh, Whitewater and La Crosse Sectors.


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