When a check is bounced – insufficient funds – overdraft fees follow, typically around $ 34 per pop.
No more to the US Eagle Federal Credit Union, based in Albuquerque, which has a branch in Santa Fe.
As of October 20, US Eagle stopped charging overdraft fees on all checking accounts.
US Eagle CEO Marsha Majors believes it is the first New Mexico-based financial institution to eliminate overdraft fees. US Eagle is New Mexico’s only credit union with no overdraft fees, said Dan Mayfield, until recently a spokesperson for the Credit Union Association of New Mexico.
US Eagle had already suspended overdraft fees last year during the pandemic. The majors have decided to make the move permanent.
“Now is the time to do it,” said Majors. “Getting over the overdraft fee is the right thing to do, and it directly aligns with our brand promise that people mean more. “
Rosina Lowance, who manages inventory and distribution for Nambé’s eight retail stores, paid overdraft fees two or three times last year on her US Eagle account.
“I think it’s great,” Lowance said of the fee cut. “It helps me dig a deeper hole than the one I’m already in. [When a check bounces], then I have to find more funds to cover it.
Alliant Credit Union, which eliminated overdraft fees in early August, is the only credit union on national lists of financial institutions that have no overdraft fees. Almost all of the others are online banks or investment brokerage firms that offer checking accounts.
Fewer than 20 establishments are commonly mentioned on these lists.
“Overdraft fees are among the most controversial bank charges and have been the subject of public debate in recent months. Forbes magazine wrote this year.
Americans paid $ 12.4 billion in overdraft fees in 2020, up from $ 17 billion in 2018, according to a report from the Financial Health Network.
US Eagle typically raised between $ 1.5 million and $ 2 million per year from the 10,000 to 20,000 members who charged overdraft fees to the 86,000 members of the credit union. US Eagle has nine branches in New Mexico and 1,391 members in Santa Fe.
US Eagle did not charge a fee after the first overdraft, but subsequent overdrafts resulted in a fee of $ 29 or $ 33, said Anneliese Elrod, chief operating officer of US Eagle.
Elrod added that 25 percent of US Eagle members are “on low income.”
Revenue from other product services will offset the loss of overdraft fees, Majors said.
“We envisioned this even before the pandemic,” Majors said. “We talked about it periodically. We have started to hear from major financial institutions taking this leap. “