Monday, July 27, 2009

Cash for Clunkers

Most people have probably heard about the "Cash for Clunkers" government program. Exact details of the program were unknown until the 135 pages of rules were provided last week.

A brief overview of the program is as follows;

The eligible "clunker" has to be in running condition, able to be driven, and can't be more than 25 years old. An exception to this rule would be very large pickups and vans (defined as 8,500 to 10,000 pounds of gross vehicle weight) that must have been built since 2001.

The program runs through November 1st and is retroactive to July 1st.

You must have owned your "clunker" for at least a year and be able to prove it. You must be able to show proof of insurance for the previous year.

"Clunkers" must get get less than 18 miles per gallon (mpg) combined fuel economy, as rated by the Environmental Protection Agency. The new car being purchased must obtain at least 22 combined mpg, a new truck or SUV must be rated for at least 18 mpg. The program only applies to new vehicles being purchased.

Here is where the cash part comes into play: If your "clunker" is traded for a new car that achieves 4 to 9 miles per gallon better fuel economy, the cash credit is $3,500. If it gets 10 mpg or more better than the old car, the credit is $4,500. If you are trading in an SUV or pickup and want to buy another similar vehicle, you get $3,500 if there is only a 1 mpg improvement, and $4,500 for a 2 mpg or more improvement.

All "clunkers" traded in under the program must be destroyed, not resold.

The government web site for the "Cash for Clunkers" web site is .

Tuesday, July 14, 2009

Interchange Fee Dispute

Retailers are asking Congress to consider regulations and restrictions on interchange fees paid by retailers when they accept credit and debit cards for purchases. The retailers are claiming that the interchange fees are “too expensive” and drive the costs up on products and services purchased by consumers.

I beg to differ on this issue. First off, retailers are receiving their money quickly and efficiently for items purchased when a credit or debit card is used for a purchase. Compare this to accepting a check for payment, which may or may not be paid when it is presented to the institution. Insufficient checks or counterfeit checks are a considerable risk when accepting checks for payment. Returned check charges and fraudulent checks would hurt their bottom line as well. Check deposits would have to be made with a financial institution that would result in several days before the merchant received their money on the checks accepted.

Financial institutions do earn interchange fee income when credit or debit card are used. This income though is necessary to cover our costs associated with providing this convenience. Interchange fees cover the costs of data processing, card fraud, and defaults on credit cards. Consumers like using their credit and debit cards and it is service that institutions want to continue offering in the future.

Frankly, if interchange income was eliminated or drastically reduced on credit and debit card transactions, all institutions would have to re-evaluate their card programs. New fees and account restrictions would have to be created to cover the expenses associated with running the program without the interchange income.

The big retailers seem to want something (convenience and protection against fraud) without having to pay for it. The current interchange fee structure has been working for years and, as the saying goes, “If it ain’t broke, don’t fix it”.

Monday, July 13, 2009

Mailings on VISA Debit Cards and ATM Cards

Members are advised to watch their mail closely if they are expecting a new VISA Debit Card or ATM Card. A new card can be mailed either as a new card, a normal replacement cycle to replace an upcoming expired card, or as a replacement to a card that may have been compromised in an outside data breach. As an example, if your active card expires in the month of July you would be receiving your new replacement card during the month of July. (The old card would be good until July 31st). The expiration date is embossed on the front of your VISA Debit Card or ATM Card. Review your own expiration date(s) so that you know when to be expecting a new card.

On a card replacement due to a data breach, we mail out letters to all members impacted by the compromise and inform them that a new card will be mailed within a specified time. Unless there is active fraud taking place on our card base, most members will still be able to use their old VISA Debit Cards or ATM Cards for at least 30 days. Any data breach letters sent would specify the time frames surrounding the new and replacement card.

One problem that we are seeing with mailed cards is that members don't always open the mailed envelope containing the replacement card(s). For security reasons, there are no obvious markings on the mailed envelope that would indicate that a VISA Debit Card or ATM Card is inside the envelope. The idea with the plain envelope is to prevent theft of the cards from the time it is shipped out until the member receives the mailing. The return address on the mailings has our PO Box 128, Huntsville AL 35804 address. On some mailings it has Card Center NAECU as the sender's name.

If you are expecting a new or replacement VISA Debit Card or ATM Card, please watch your mail closely and look for an envelope with the PO Box 128 sender address.

Wednesday, July 1, 2009

Earn $10 for Referring New Members

Existing members of the credit union can help a friend or relative while also helping themselves with our Membership Months promotion. The credit union will pay $10 to existing members who refer new members to join North Alabama Educators Credit Union using our Membership Months coupon. (Link below) The new member who joins will also earn $10 towards their new account. A win-win for all!

People sometimes hear our name "North Alabama Educators Credit Union" and think that you must be a teacher to be a member of the credit union. This is not the case. There are other ways to be eligible for membership. They include;

All students (K-college) living in Madison, Morgan, and Limestone counties in Alabama.
Any relative of an existing member in the credit union
PTA/PTO/PTSA members of eligible sponsor schools throughout the Tennessee Valley
All retired teachers living in Madison, Morgan, and Limestone counties in Alabama.
Employees of private schools and day cares in Madison, Morgan, and Limestone counties.

All employees of the eligible school systems are eligible for membership. This includes school bus drivers, cafeteria workers, and support staff.

Help the credit union grow its membership and earn some money in the process. Your referral will thank you for leading them to the credit union. Once a member, they could also refer new members and earn some cash!

The link below has the Membership Coupon near the top of the page. The page also provides a more detailed list of eligibility methods.

Here is the link;

$250,000 Federal Insurance through 2013

The Helping Families Save Their Homes Act of 2009 includes a provision extending $250,000 share insurance coverage provided by the National Credit Union Share Insurance Fund through December 31, 2013. This higher level of coverage was originally set to expire December 31, 2009. Investors with deposits exceeding $100,000 will now have other time deposit options to consider that would maintain full federal share insurance up to the $250,000 threshold.

Hopefully, the $250,000 federal insurance coverage limit will be made permanent at some point in the future. It would seem very difficult to revert back to the old $100,000 insurance coverage in the future. To be clear though - the $250,000 share insurance coverage is only guaranteed through December 31, 2013 at this time.

The National Credit Union Administration (NCUA) has a good Share Insurance Tool Kit available on their web site to help credit union members understand how eligible insurance coverage is calculated. Visit for information.