Interchange Amendment Fails - Canada Example

A replay of the Senate debate on the interchange rate fix legislation was covered last evening. It is disappointing that the final vote failed although we are pleased that both Alabama Senators voted for the bill. We thank Senator Richard Shelby and Senator Jeff Sessions for their support on behalf of Alabama consumers.

Senator Durbin noted in his comments that Canada retailers do not pay any interchange rates, implying that that system is superior to the system in the United States. Perhaps Senator Durbin should have compared the consumer side of the equation in Canada. A quick online search of Canadian credit unions show a considerable increase in the amount of banking fees paid by account holders as compared with credit unions in the United States. Monthly service charges range from $15 to $6, depending upon the type of checking account. Electronic transactions in Canada generally offer 5 to 10 free transactions per month and then a per transaction fee of $1 or more is charged. There were also several examples found where $500 daily electronic transaction limits were in place. This limit is most likely due to minimizing the fraud exposure on behalf of the institution.

It would be interesting to compare retail prices of products on common items sold in Canada as opposed to the United States. Given the fact that interchange rates are not being paid by retailers in Canada, they should be selling their products for a lessor price. My guess is that prices are not that much different though. Certainly not enough to cover the additional banking fees being paid by consumers in Canada.

If credit union members want a glimpse of how interchange rate changes can affect their bottom line, look online at credit unions in Canada and look over their fee schedules. It is unfortunate that Congress did not choose to perform a consumer impact study that would have been required in the interchange fee legislation that was ultimately voted down.

Refer a New Member - Earn $10.00

Membership Months for North Alabama Educators Credit Union is now in effect through September 30th. What does this mean to existing members? Existing members can refer potential new members to North Alabama Educators Credit Union and earn $10.00 for each qualifying new member who opens an account. Some of our best sales people are our own members. Share your good experiences and stories to relatives (any family member of an existing member can join) and encourage them to join the credit union. If you have three children who don't have accounts, that is $30.00 to get them started on a savings plan PLUS you would earn $30.00 as well for referring the new accounts! Membership coupons can be printed out on our web site - CLICK HERE.

Don't forget that friends and co-workers may be eligible to join the credit union as well. The page link above provides a resource for membership eligibility qualifications. As an example, PTA members of sponsor schools are eligible and anyone can become a member of the PTA. All students in the counties of Madison County, Morgan County, and Limestone County are also eligible for credit union membership. There are numerous other eligibility methods.

Become a salesperson for North Alabama Educators Credit Union and earn some green while helping the credit union to continue our membership growth.

Capturing Photos, Photo ID's, and Signatures

North Alabama Educators Credit Union is committed to protecting your financial accounts from fraud and identity theft. It is our responsibility and obligation to insure that all financial transactions being completed are being performed by the members authorized for access to a particular account. The credit union is financially liable for any fraudulent or erroneous transactions posted to a member’s account.

Our credit union staff are digitally capturing photos, photo ID’s, and signatures to help prevent errors and fraud on our membership. This information is only used for the purpose of verifying our members upon subsequent visits. Please keep in mind that identity thieves can counterfeit photo ID’s in an attempt to steal account funds if they know your account number. Having this information on file also can assist members if they have lost their own photo ID and need to perform a transaction. This exact scenario occurred at our Athens branch following the April 2011 tornadoes when a member’s identification was lost but we were able to verify the member’s photo and signature on file.

We also hear from longer term members who do not want to have to show their photo ID when performing a transaction. With nearly 12,000 members it is impossible for our staff to recognize every member of the credit union. This photo retention process can assist those longer term members since we will have the photo ID available on file to the credit union staff member.

Please keep in mind that we are simply trying to protect member accounts. The information is not being shared with anyone outside of the credit union. We are already seeing the information when we post member transactions now. We would appreciate your cooperation in our efforts to secure and protect your membership account(s).

Request for Legislative Help - Interchange Rates

This afternoon I will be meeting with Congressman Mo Brooks and other credit union CEO’s in the area to discuss the interchange fee issue from the credit union perspective. Credit union members will be negatively impacted down the line if interchange fee rates are drastically reduced. Retailers may want to pay less for accepting debit and credit cards, but they give no guarantees and the law provides no guarantees that consumers will reap any of the benefits of lower interchange fees from the retailers. Those savings will go straight to the retailer’s bottom line and they will be under no obligation to lower retail prices for the goods and services they sell.

If the credit union receives less income on our debit card program due to a reduction in interchange rates, that lost income will either have to be created somewhere else or current services will have to be altered or terminated. Either way, our members would see a distinct difference in some fashion. I doubt that our members would see any difference in the prices that they pay with their local retailer.

The last thing that consumers need right now is less money in their own pockets. The economic impact of the changes to interchange rates has not been evaluated and studied. Our fragile economy does not need laws that could curtail consumer spending. The credit union industry is simply asking Congress to delay implementation of the Durbin Act section that deals with setting a price on interchange rates to allow time for a financial impact study. We will be asking Congressman Mo Brooks for his support of HB 1081 to allow such a study. I agree that some reform is probably necessary in the card payment system but the current pricing solution is woefully inadequate since the pricing model did not address all costs associated with providing a card program.

FYI – Previous posts have addressed the interchange rate fee issue in more detail. If any members have questions or comments over the interchange rate issue, feel free to contact me.

Thoughts and Prayers for our Community

The events that have unfolded since the first tornado siren last Wednesday will forever remain in the hearts and minds of our local community. The devastating storms throughout Alabama have literally changed the face of communities. Loved ones have been lost, homes have been swept away, and communities have been brought to a standstill with crippling long-term power outages. Through it all though we have also seen neighbors helping neighbors, people helping people.

Our thoughts and prayers go out to those impacted by the storms. Together, the communities will rebuild and our lives will return to a level of normalcy that we have come to expect.

We appreciate the patience of credit union members in our process of bringing offices and services back online. The credit union will be helping members in the coming weeks and months to minimize the negative financial impacts of the storms and power outages. An overview of credit union assistance plans are available on our home page now. Additional assistance steps will added as new member needs are identified.

People helping people - it's just the right thing to do.

Overdraft Privilege for ATM's and Debit Cards

Unlike many financial institutions in the country, North Alabama Educators Credit Union has never automatically covered a debit card transaction and charged a fee equivalent to an insufficient funds fee. If the money was not available in the checking account, the debit card transaction was declined.


Federal law was enacted in 2010 that now requires consumers to consent or "opt-in" to the availability for overdrawing their checking account with a debit card for ATM transactions or everyday debit card transactions. This was good consumer legislation since it placed the power of the available overdraft privilege access with a debit card in the hands of the credit union member. North Alabama Educators Credit Union now offers Overdraft Privilege on debit cards with a maximum overdraft privilege amount of $500 to qualified members. CLICK HERE for full details and the OPT-IN form on the NAECU program.


Percentage wise, the numbers range from 50-75% of credit union members signing up nationwide for this service. This doesn't mean that 50-75% of credit union members are routinely overdrawing their checking accounts with a debit card. A much smaller percentage of members will actually ever use overdraft privilege, period. Opting-in to Overdraft Privilege for ATM transactions and everyday debit card transactions costs nothing if the service is never utilized.


Why opt-in to Overdraft Privilege for ATM transactions and everyday debit card transactions? It provides a safety net should an emergency occur. Consider an emergency visit on a weekend where that $150 co-pay is due on the spot and you don't have $150 available in your checking account until payday. Also consider the scenario where you have a cart full of groceries and your debit card is declined at the checkout line due to an insufficient checking balance as a result of a mathematical balancing error or unrecorded transaction. An embarrassing situation can be avoided with the Overdraft Privilege service.

Overdraft Privilege is not a loan and should not be considered a line of credit. The credit union offers traditional overdraft loan protection that all checking account members should pursue to lessen the cost of an overdraft. Members are also encouraged to use our free CU-Online Home Banking and free Memberlink Audio Response services to monitor their available balances and prevent unwanted overdrafts.

Email Data Breach - Epsilon

A data breach at third-party marketer Epsilon has exposed the email addresses and names of customers at major credit card issuers and national retailers. Members of North Alabama Educators Credit Union should know that we were not involved in the email data breach and have no vendor connection to Epsilon.

There is a genuine concern that an increase in phishing attacks, or fake emails, will occur with the intent of stealing personal information from consumers. The normal phishing attempt is to try a shotgun approach and hope to hit on a victim who actually is a client of the business in the fake email. With this email data breach however, the scammers will know exactly what companies the victim does business with. The email data breach greatly increases the odds of fooling consumers into thinking that they are communicating with a company that they are familiar with, when in reality they are not. The breach can also increase the odds of spreading computer viruses and spyware when victims click on embedded links in the fake emails.

Consumers should NEVER respond to an unsolicited email, telephone call, cell phone text, or mail request for personal information. If you have questions over a request received, please contact the company involved at a published telephone number to verify the request. Also do NOT click on links or open videos from emails from trusted sources unless you are 100% certain of the source of the email. Maintaining a good anti-virus program on your computer is an absolute requirement these days.

Be careful out there - things are not always what they appear to be!