Local Credit Union Responds to Accusations of ‘Outlandish’ Fees

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In response to this letter to the editor complaining of rising fees at their institution, Shon Welborn of the Community Credit Union of Southern Humboldt wrote the following response:

I came to CCUSH almost 17 years ago. My mission was to put this Financial Institution back together following some very challenging times, to manage and lead it into the future, insuring sustainability. Our membership believed in this organization and actively helped to accomplish that mission….and then some. Why, then, are we receiving feedback that indicates that now we look like a large commercial bank and no longer a local credit union.

We don’t get any more local than Garberville. We are a single branch, headquartered right here in Southern Humboldt with all the beauty, diversity and challenges that come with choosing to live remotely. Everything is more expensive here, groceries, gasoline, statements and especially cash handling.

Recently we have listened to you share your feelings regarding the new fees, specifically the statement and cash handling fees. We want you to know that we hear you. Your board of directors, supervisory committee and staff have been grappling with the rising costs of managing Community Credit Union. When a bank abandons a community with very little notice the resulting rush to move accounts to the north of town or to the south puts a strain on everything and everyone effected by that desertion.

To the non-banker it can feel like a rip-off. After all, how much can a statement actually cost? Plenty!

The actual expenses associated with statements are rising and will continue to do so into the future as most of the country moves toward paperless. The number of companies who print statements are shrinking and the price for this service continues to increase. Our actual expense in 2015 was: $35,410.03 to print, stuff and mail statements. At mid year we had 5,500 members (with a very few already taking electronic statements). That equates to $6.44 per statement. Many credit unions and banks charge for statements to help offset the growing expenses. We have striven to provide as many access points to your account information as possible: speak with a teller, call into the call center, call the automated teller (toll free), view your account online through homebanking, and to receive your periodic statement either by paper or electronically. Each one of these access points represent our response to your request for choices. Each of them comes at a cost to us.

Many have indicated that they do not have a computer and do not want to learn how should they have an access point. After all, there should be an advantage (and waiver) when you reach your golden years. We’ve heard you and agree; management will take a recommendation to the next board meeting requesting a waiver of the printed statement fee when a member reaches age 62. However, if you are interested in learning more about how to sign up for an electronic statement, training classes are being scheduled at the Healy Senior Center. We hope to have training sessions set up at the Senior Housing Community Room (arrangements pending), there are computers at the local library (training if needed is available from many staff members here at the credit union) and we have arranged for discounted minutes at Emerald Technology. Every time you chose to take an active participating role in your credit union, we all win.

The actual expenses to handle currency have skyrocketed, especially for an organization of our size. Most credit unions at our asset size have one employee for every 400 members. We must have one for every 200 members and we are still understaffed. We must have specialized equipment to handle the sheer number of bills that flow in and out (over the counter). That equipment is very expensive to purchase and to maintain – the counter/detectors must be cleaned daily as the currency is filled with residue and gums up the works. Currency is filthy, the lines are long, members want to know what is taking so long, staff endures constant complaining with a smile (most of the time), and we want them to do more.

Add to this, we have regulators, auditors, and examiners who insist that we comply with onerous regulations that have been put in place by well-meaning politicians and governing organizations. For a credit union our size we have 1.5 certified compliance experts (those ongoing certification trainings are far away and expensive). Similar sized credit unions employ 0.5 experts. We currently employ 9.5 tellers (including the two New Accounts staff). Credit unions of similar size typically employ three – and they all have additional duties, ours assist our members all day, every day.

Our fees are not many times the actual cost of the service, in fact they are less than the actual cost to us. We continue to absorb as much of the fees as possible. For this credit union (or any business) to sustain itself, it must understand the nature of the business, where the hidden costs lie and determine how to cover these expenses.

I have read much of late about why we must charge to take your money because we just make money with it. Nothing is ever as simple as it seems that it should be. To repeat: our costs to take your money have skyrocketed.

Let’s explore the process: You deposit $100, five twenty dollar bills. You hand over your cash to a teller (with a completed deposit slip and we thank you for that, you have just given us something to balance to, eliminating a step that we used to have to take and shortening both your time at the window and the wait in line – everyone wins). The teller runs those bills through the counter/detector to verify we have five of them and that they are not counterfeit, the bills go into the drawer, and you receive a receipt, exchange a few pleasant words and go about your day. But not for us, that $100 doesn’t stop there.

At the end of the day we count it again to balance a drawer; at some point, it leaves the teller’s drawer and is transferred to the vault where it is counted (and verified that it is not counterfeit) again (the second time it is handled). At some point it is bundled into a bag to be shipped (the third time it is touched). At some point an armored service comes in to pick up the shipment. We should be done with that $100 by now, right? No, now we have expenses for the armored service. That cash is destined for our Corporate Credit Union (for deposit into our account where it earns a pitiful amount). That $100 (now in your account as that deposit) is insured for you by a government entity which is an expense to us. That $100 as currency is insured by us while it is inside our drawers and vault, another expense. Then we must pay for “over the asphalt” insurance while it is in the hands of the armored service, another expense. On top of that insurance we pay for the armored service (with a gasoline surcharge added in). It takes two days for that deposit to hit our account – two days of lost interest (like you, we need every dime).

When you hand a check for deposit over the counter it is processed that day, an electronic file is created and sent before we go home. It is in our account that evening. When you create an electronic deposit (payroll, social security, recurring retirement direct deposit), it hits both your account and ours at the same time, a back office transaction. Very efficient. Very affordable.

I have asked Kym Kemp if we can begin a series of educational pieces for Letter to the Editor to explain how your credit union works, where are our expenses that are not obvious, why are we required to manage to ratios (and not just a P&L like most local businesses) and what are those ratios, why are they important to all of us and equally meaningful: what happens to a community when it is abandoned by a financial institution. These are just a small portion of the issues, challenges, opportunities and threats faced by your local credit union. We do not enjoy efficiencies of scale like large commercial banks or large credit unions with many branches. We cannot share the expenses associated with specialized expertise – we must hire, pay, train, and retain these certified professionals. Shon Wellborn

 

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34 comments

  • Pingback: New Service Fees by SoHum’s Community Credit Union ‘Outlandish,’ Says Letter to the Editor – Redheaded Blackbelt

  • “Our actual expense in 2015 was: $35,410.03 to print, stuff and mail statements.” I find it strange that the representative of a banking institution cannot do simple math. $35,410 a year divided by 5,500 members is $6.44 for A YEAR’S STATEMENTS, not for each statement. If a member receives 12 statements a year, then it seems Ed Denson’s estimate of 50 cents a statement is pretty close. So why are you proposing to charge $5.00 for each statement?

    I also find strange the argument that the charge is justified by a “rush to move accounts” to CCUSH. Shouldn’t this increase in members argue AGAINST a fee increase rather than for it? Or am I missing some sort of paradoxical logic in this argument?

    And while you’re at it, how about addressing my concerns about employees and officers of CCUSH indulging in fishing expeditions in my personal banking accounts to glean information about me when I make a complaint. Does CCUSH consider such a lackadaisical attitude towards member privacy ethically acceptable?

    Finally, if I wanted to lodge a complaint with the board of CCUSH regarding this intrusion into my personal banking history, how would I go about this?

    • veterans friend

      Thanks for doing the math for me. You saved me time.
      My objection to the fee was that it was sprung on us with no notice or oportunity to question it. I was under the impression (still am) that it is OUR credit union, that as “shareholders” we have a say in how things are done. I believe most of us use the credit union for this reason….we feel involved.
      The announcement of the $5 fee was abrupt and no coherent explanation accompanied it. It could have been handled better IMO

    • So what your saying is?

      $35,410.03 spent on statements in 2015 divided by 5500 members. $6.44 per member divided by 12 monthly statements. That means each statement costs CCU $0.54. Unless they left some of the math out of that letter this means each paper statement will net them an 825% profit or $4.46. If they they had been charging this fee last year they would have made $292,132.75 profit on statements alone.

  • A couple of facts from their financial filings:

    Assets: $85.4 million vs. $73.2 million. (Q4 2015 vs. Q4 2014)

    Deposits: $74.6 million vs. $63.8 million. (Q4 2015 vs. Q4 2014)

    Not bad year to year growth for a single branch credit union.

  • How about that private parking spot paid for by us to Chris Brannon .That spot would be a great place for a handicapped parking spot for his apartments . How about the next time before you spend our money you ask the members first . I believe you are capable of walking more than ten feet to your car

  • The credit union is great, the mindboggling factor though was left out that had me puzzled,..
    The fact that if you have a credit card from ccush, is the payments.
    I thought it was a local business, but credit card payments are mailed to florida.
    Can someone explain why credit card payments are sent to Florida instead of garberville,..

    • Excellent question, Koolatz, Let me explain: We have a contract with a company who’s sole business is Visa. They have all the necessary departments to run a compliant Visa department. Years ago we processed all payments here. That was a very tedious process with many opportunities for mistakes. Payments were posted in our data system and then they still had to be hand posted in the Visa terminal; even then it still took two business days to post to your account. We streamlined that by having you send your check payments to Florida (where the company is located). Our new data system automatically post your payment over the counter (or if you choose you can mail it to us in Garberville and we can post that payment) and it is electronically applied to your balance that night. You may also use our Bill Pay and electronically send a payment if your checking account is here. If your checking account is elsewhere, you may pay your bill online through their website at http://www.ezcardinfo.com and enroll there. We work hard to give you options.

  • Oh my God you guys…do you know how lucky we are. You’ve been getting stuff free for years and you’re bitching about a $5 a month charge? How long have you been here Richard? I expect you don’t remember the old days and how we were treated by the banks and other places (I’ll leave it at that). I signed the first petition to begin to start to open a financial organization that became CCUSH. We have had a “bank” that was designed for us. It’s been run by us, employeed by US. Are you even one of us? If you don’t like it go down the street to Umpqua, it’s really that simple. And the other comments are strange, do you not know how the world works? The world works a little bit in Garberville too. Sometimes.

    • Whoa Bunny…this is Garberville remember. Garberville claims to welcome all people to their community and prides themselves on questioning authority. Richard is simply questioning why and how his money is being invested. I think he has that right and CCUSH is doing their best to answer his questions. Your statement “are you even one of us” is not very welcoming or becoming of a upstanding community member. It used to be OK to question rules and methods of others in our community. You have to admit our community does not like the “good ole boys” attitude, so when we see something that looks like good ole boy, we should question it. If there is nothing to hide CCUSH and it’s board are going to come out reflecting the community concern they claim.

    • Why is the coast central credit union and the Redwood credit union have way better rates . Both are connected with the car dealers and offer the lowest rate on a used car .Our credit union is double the rate .I opened an account at coast central credit union right at the ford dealer for 40 dollars and got a loan half the interest of what our credit union charges .My employee got one at redwood credit union opened at a used car dealer in McKinleyvile

  • You’re right, that was a bit rough but I meant what I said about CCUSH being there for us so why jump on them for a $5.00 charge insuating they were big corporation or something. How does a charge, for the first time, become “good old boy”? And this “if they have nothing to hide” comment sounds like you think something’s wrong. What the hell? Richard was not simply questioning, he was combative. Sounds like he has a personal beef he needs to take up in the office. They aren’t perfect, things happen but they can always be fixed. I appreciate they have been there for us so I don’t begrudge their $5 fee. The board members pictures are on the wall….I don’t think they are hiding anything.

  • Bunny, the problem is if you do the Math they will be making way more money off these fees then they need to pay there explained over head costs. It’s all in the math. When a bank wants to make that kind of money off its customers you have to ask questions! We all love Cush and appreciate them,! But this matter is definitely worth discussing!

  • I went in the CU to establish an online account when I learned of this. I really don’ t need a monthly statement. But their clerk told me I had to sign up myself @ home-she couldn’ t do it for me. What happened to customer service? All her instructions went out of my head when I saw the page. You’ re lucky to have Kelly Johnson, who helped me set it up.– and in half the time it took the clerk to give me directions! Not everyone can translate directions onto a computer screen, as I sadly found out. Thank you, Kelly!

  • “When a bank wants to make that kind of money off its customers you have to ask questions! ”

    But Eel707….it’s only $5.00. Other banks charge much more. I just don’t understand the outrage. We have gotten it all for nothing since the beginning. They are a non profit business. I trust the board and the management. Like I said before….not always perfect but always there for us since the beginning so long ago.

    • Are you really arguing for this. Do you not do the math I’ll go ahead and remind you but keep in mind being given a bullshit excuse about it costing them money makes people question motives. Especially when the simple math says that they stand to make 300k annually.

  • What a load of hooey… When the CUSH first started online banking years ago I got a notice from them asking me to logon and enroll. So I went to the site, answered all the security questions, filled out all the required info, spent time learning how to navigate the process and was all ready for a pat on the back. Instead, I find out later that, based on some criteria concerning my rare use of the feature (something I never asked CUSH for in the first place), they had simply decided to zap my access without even the courtesy of a notice. When I asked them why they had done this, I was told how expensive it was for them to maintain the service I was not using enough to warrant, by their new calculations. If Shon thinks I’m going to be bothered with this nonsense from them any more, or pay them $5.00 to mailing my statement, they can kiss my assets goodbye.

  • I have a coast central account and a credit union account. Coast central charges a 6.00 a month checking account fee, 5.00 over draft, 27.00 if you are not signed up for overdraft protection. Their minimum hold for a savings account is 50.00 if it drops below that its 6.00 per month. The credit union doesn’t charge a monthly checking fee, they are eliminating the 5.00 overdraft fee, its 25.00 with out overdraft protection, they only require 25.00 in savings. Read your inserts people, maybe then you would realize this didn’t come out of the blue, there have always been fees to do banking any where.

    • Oops I guess I should have read my insert better 🙂 credit union charges 30 for overdrafts. I got caught up in the moment. Still stand by the other figures from coast central.

  • As one of those faces on the wall of our Credit Union lobby, I appreciate the discussion, both pro and con. Bunny is right–none of us are trying to hide anything. Those of us on the board have donated thousands (not exaggerating, folks) of hours to understand not only the complexities of finance, but the never ending, always growing quagmire of governmental regulations in order to exist as a credit union in a world dominated by corporate banks. That’s not a complaint, it’s just the commitment of being on this particular board. And we watch everyone on the staff work their butts off to not only keep our credit union functioning smoothly, keep our members’ money safe, but also to please our members…some of whom are not always civil in return. All of us, staff and volunteers, agonize over every decision that affects you. Do you think it pleases us to give you news you won’t like? Of course not. But our job is to protect your money and keep the credit union within the guidelines that the federal regulators set….That is not a request on their part, it is a legal requirement for continued operation. That leads to a much bigger discussion, which I know Shon and her team will continue to have with all of you. In the meantime, I would also ask that you remember that we employ a lot of people in this community, with not only jobs, but jobs with living wages, benefits and career paths. That’s part of what makes a healthy community, and yes, that is part of what you support by being a member of CCUSH. If you know someone who would be a good fit for our career opportunities, please send them our way! You’ll be helping someone find his or her career path AND reducing your own teller and loan wait times. We are not perfect–we’re human, and we won’t always be able to tell you what you want to hear, but we are truly doing our best to safeguard your money and make this community a better place. We are your neighbors, not faceless names in a city far away. We also listen, as we always have, and will continue to seek solutions for you.

  • Another factoid from their financials. If any employees are paid in excess of $100K, they must be listed.

    There is only one: Shon Welborn.

    • And thank the Universe for that! When Shon arrived, we were about to be
      merged with Coast Central, due to our financial ratios, as dictated by the regulating agencies. In other words, we were about to go under as a local credit union. Thanks to Shon’s expertise and experience in the Credit Union World, we have emerged as a unique but fully functional institution. We have regularly challenged the regulators due to our local economy, but have gained respect in the industry for our ability to maintain and surpass the required ratios and performance. In short, without Shon Wellborn, we would now be a branch of Coast Central, and our loan department would be subject to one-size-fits-all loans instead of our uniquely driven member responsive operation. The financial world is increasingly complex, and we need managers who understand it. We didn’t have this prior to Shon’s arrival, and the Board was insightful and fortunate in hiring Shon. I was not a member of the Board at that time, but as a member now, I can only rejoice in the benefits to me in education and understanding of the Credit Union World that Shon has brought to us volunteers and staff. Shon is well worth her wage.

      • Thank to pot growers flooding the credit union with money .

      • Triniboldticino

        In the 1960’s we had “school” bankbooks. Every week, put in a dime, two quarters, a dollar, and give it to the teacher. The funds would go to the local savings bank and we’d get the bankbook back a couple days later. Then, when mortgage rates were around 6.5 to 7%, the savings accounts paid 5.25%. Then banks began to realize they didn’t HAVE to pay depositors hardly any interest.

        Then, with the advent of the 1970’s, it was decided that “administrators” of all ilk – banking, corporate, hospitals, insurance companies – needed to be paid outrageous amounts of money. The president of the bank went from $30,000 a year to $90,000 a year and it has climbed stratospherically ever since. Can’t justify an increase in administrative pay this year? Invent some benefit. I know one hospital administrator that gets a $1MM a year compensation package. She has a 4 year nursing degree and an MBA (the MBA is a one-year degree unless you’re slow).

        Banks want to charge you for depositing your money with them for “safekeeping,” while they use it, lend it out on credit cards at 24.5%, and pay you nothing. Meanwhile, the tellers and “assistants” in the various institutions are delegated all the work, but don’t share in the largesse. Same thing in government. Hotshots are overpaid, underworked and believe they “deserve” the ridiculous salaries because “if they were in private employ they’d be getting WAY more money.” It’s a mindset that developed, the frog was boiled and now the average American is paying for it in spades.

  • When the CUSH first started online banking years ago I got a notice from them asking me to logon and enroll. So I went to the site, answered all the security questions, filled out all the required info, spent time learning how to navigate the process and was all ready for a pat on the back. Instead, I find out later that, based on some criteria concerning my rare use of the feature (something I never asked CUSH for in the first place), they had simply decided to zap my access without even the courtesy of a notice. When I asked them why they had done this, I was told how expensive it was for them to maintain the service I was not using enough to warrant, by their new calculations. If Shon thinks I’m going to be bothered with this nonsense from them any more, or pay them $5.00 to mailing my statement, they can kiss my assets goodbye.

  • How much did they spend on that stupid banner for Sharon ? Are we going to have to look at shon on the front of our credit union when she leaves in Jan ?How many dinners and retreats and party’s have been paid for by us ?

  • I got the statement, read the changes of fees card, wasn’t sure what was going on so I went in, asked what was up, got it explained to me and the helpful associate there helped me set up my online account and that was that; sure I can afford the $5 but I don’t wanna pay and I’ll probably never go online to see what I’ve got–if I really care I can ask the teller for details.
    Others may see this differently.

  • I have, for various reasons, multiple accounts at the Credit Union (and by the way I still think of it as the Mateel Credit Union, speaking of old timers, Bunny). I also make quite a few cash deposits. Between the charges for putting money in to the credit union (yes, charges for making deposits) and the statement charges, I am looking at paying several hundred dollars a year more than before these new fees went into effect. I’m not happy about that, and despite Shon’s letter (and faulty math), I cannot see that the fees are justified. They feel to me like one more example of businesses nickle and dimeing us to death. I don’t like it when the airlines do it, and I don’t like it when the credit union does it. I have always understood that the airlines were run by corporados out to charge what the traffic will bear. I did not understand that our local credit union had gotten so big that it felt it could adopt the bad habits of the corporate world. I don’t like paying the money, and I don’t like what the charges say about the attitude the credit union management has towards its members. If the credit union has $74 million dollars, it can d*** well up its interest rates by .001% and make the money where it should: on loans, not on deposits. That $74 million belongs to the members, and the members should not be charged for adding to it, nor for getting an accounting of it.

  • Ed, Shon is going to explain how our finances work at the credit union in her next letter to the editor. If I weren’t on the board, I’d share your opinion. Our very growing presents major challenges that Shon will address. It’s complicated and counterintuitive, at least to me. If we don’t charge fees, we won’t be here in the next year or so.

    • Whats this a scare tactic . There are so many options for dealing with that ratio .How can we trust shon with our credit union when she is gone in 35 weeks

  • Right On Ed . You are 100 percent correct . You should join the board or the advisory board .They both have openings .That glossy no recyclable insert they put in the statement every month is also a waste of money . I say it is time for an auddit of there party and whatever they feel like expenses

  • Well, hallelujah for the recommendation for waivers for elders who request it. That’s a good start, anyway.

  • And they NEED to stop it with the cheesy holiday and promotional decorations they meticulously hang up.

  • New Accounts Available

    Welcome to Umpqua, the worlds greatest bank!
    We will do you like CCUSH, but twice as hard and not really care about silly letters to the editor.

    Sincerely,
    Umpqua senior management

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