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A funny thing happened on the way to the Supreme Court, which in February ruled to limit credit union membership expansion: The bankers who filed the original lawsuit against credit unions recorded their highest-ever earnings--$59.2 billion in total profit for 1997--due in large part to fee income.

Bank customers shelled out $18 billion last year just in service fees for deposit accounts. Altogether, banks have devised 250 different fees, according to the U.S. Public Interest Research Group (U.S. PIRG), Washington, D.C. And, says U.S. PIRG, the bigger the bank, the higher the fees.
      Meanwhile, credit unions--which bankers erroneously paint as having unfair competitive advantages--continue to hold the line on fees. Estimates show credit union fee income averages only a third of what fee income averages at banks. Moreover, 14% of credit unions don�t even charge fees. Unlike banks, credit unions are not-for-profit institutions and rarely price fees to earn revenue. They generally charge fees for one of two reasons: 1) to offset the cost of offering a particular service; or 2) to penalize abuses, such as check bouncing--in the hope of changing behavior.
      A 1998 fee survey report released by the Consumer Federation of America (CFA), Washington, D.C., and the Credit Union National Association (CUNA), Madison, Wis., includes a side-by-side comparison proving that credit unions beat banks for lower fees in almost every case.
      Some of the survey�s more dramatic findings:
  • Only 15% of credit unions charge monthly fees for economy share draft/checking accounts, compared with 86% of banks. A scant 6% of credit unions charge per-check fees on these accounts, vs. 95% of banks.
  • Free share draft/checking accounts (no fees, no minimum balance) are available at twice as many credit unions as banks--64% vs. 32%.
  • Banks charge substantially more than credit unions for check overdrafts ($17.21 vs. $9.62) and stop payments ($15.05 vs. $9.51).
  • Only 16% of credit unions assess ATM (automated teller machine) surcharges to noncustomers, compared with 62% of banks.
      Many consumers save hundreds of dollars a year by shopping for low- or no-fee financial services. Here is a comparison of average fees that credit unions and banks charge for several popular products and services.
      Hefty fees helped
      banks earn record
      profits in 1997.


      Credit unions top
      banks for offering
      the lowest fees.

Share draft/
checking accounts

Credit unions

Economy checking
(highest monthly fee charged)
$3.11/month $3.69/month
      Per check 17 free checks,
then 22 cents per check
9 free checks,
then 36 cents per check

Regular checking
(highest monthly fee charged)


      Per check 29 free checks,
then 20 cents per check
15 free checks,
then 20 cents per check

Interest-bearing checking
(highest monthly fee charged)


      Per check 29 free checks,
then 26 cents per check
17 free checks,
then 28 cents per check

Not sufficient funds (NSF)
(for check returned)



Overdraft (check covered)



Stop payment



Check printing markup
(% over institution's cost)


ATM use Credit unions Banks
Per transaction
(for owned ATMs)
$0.82 $0.74
(90% allow an average
6.6 free transactions
per month)
Per transaction
(for nonowned ATMs)
$0.93 $1.00
(62% allow an average
5.2 free transactions
per month)
Per-transaction surcharges
for noncustomers using
owned ATMs
$1.04 $1.13
Credit card and other fees Credit unions Banks
Annual credit card fee $11.61 (grace card) $16.69 (unspecified)
Cashier check $2.10 $3.34
Money order $0.93 $2.06
Certified check $3.35 $8.99
Annual safe deposit box $17.61 $17.72

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©1998 Credit Union National Association, Inc.