Arizona Federal pays the lowest and worst savings rate at AZFCU.org

Arizona Federal pays the lowest and worst savings rate

Arizona Federal’s “The Power of US” slogan means that the insulting $3 unavoidable monthly fees are powering Arizona Federal to the detriment of its members.  Why get ripped off for $3 monthly, which is $36 annually, when you can go elsewhere to join a bank or credit union that doesn’t have this ripoff fee?  In addition, while they try to spin it as a club, you aren’t getting superior benefits.  A 0.01% interest rate is one of the worst in the market.  They also falsely claim it is needed to pay for online banking or other services, but these same services can be found elsewhere for free.

Listed in ascending order, from worst to best.

NAME savings rate
ARIZONA FEDERAL 0.01%
LANDINGS/TSCU 0.01%
PINAL COUNTY 0.01%
TUCSON OLD PUEBLO 0.01%
WELLS FARGO BANK 0.01%
CHASE BANK 0.01%
US BANK 0.01%
BANK OF AMERICA 0.01%
BBVA COMPASS BANK 0.01%
CREDIT UNION WEST 0.03%
FIRST 0.03%
MARISOL 0.03%
SAN TAN 0.03%
DESERT SCHOOLS 0.05%
ARIZONA STATE 0.05%
TRUWEST 0.05%
ARIZONA CENTRAL 0.05%
SUNWEST 0.05%
CANYON STATE 0.05%
DEER VALLEY 0.05%
VANTAGE WEST 0.05%
ALTIER 0.05%
ALHAMBRA 0.05%
TUCSON 0.05%
PIMA 0.05%
PYRAMID 0.05%
BMO HARRIS BANK 0.05%
NATIONAL BANK OF ARIZONA 0.05%
AMTRUST BANK 0.05%
AMERICAN SOUTHWEST 0.08%
HUGHES 0.10%
MIDFIRST BANK 0.10%
MERIDIAN BANK 0.10%
FIRST AMERICAN 0.15%
A. E. A. 0.20%
NAVY – MILITARY ONLY 0.25%
ALLIANT – $10 fee to join 0.70%
ALLY BANK – online only 0.84%
NAME savings rate
Posted in comparison spreadsheet, competition | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Arizona FCU $3 monthly fee cannot be avoided. Competitors offer easy options to avoid monthly fees.

AZ FCU impossible to avoid the fee, even with an infinite balance

AZ FCU impossible to avoid the fee, even with an infinite balance

Low information members keep their money at AZ FCU. Smarter choice members move their money where they aren’t ripped off, not only by the low interest rates that Arizona Federal pays, but also by the unavoidable $3 monthly ripoff fee.

NAME – Balance required to avoid fees in savings account – listed in ascending order
ALLY BANK – online only bank $0
ARIZONA STATE $5
CREDIT UNION WEST $5
FIRST $5
SUNWEST $5
DEER VALLEY $5
VANTAGE WEST $5
TSCU/TEMPE SCHOOLS $5
PINAL COUNTY $5
ALLIANT – $10 fee to join $5
NAVY – MILITARY ONLY $5
PYRAMID $5
FIRST AMERICAN $5
AMERICAN SOUTHWEST $5
TRUWEST $25
CANYON STATE $25
MARISOL $25
ALTIER $25
ALHAMBRA $25
SAN TAN $25
TUCSON $25
PIMA $25
TUCSON OLD PUEBLO $25
A. E. A. $25
ARIZONA CENTRAL $25
HUGHES $50
DESERT SCHOOLS $200
NATIONAL BANK OF ARIZONA $200
MIDFIRST BANK $250
WELLS FARGO BANK $300
CHASE BANK $300
US BANK $300
BANK OF AMERICA $300
BBVA COMPASS BANK $500
BMO HARRIS BANK $500
AMTRUST BANK $500
MERIDIAN BANK $500
ARIZONA – cant avoid $3 MONTHLY ripoff FEES even with a $1 million balance
NAME – Balance required to avoid fees in savings account – listed in ascending order

Posted in comparison spreadsheet, competition | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

How much money on deposit do you need at Arizona FCU to recover the $36 in annual fees? About $500,000

How much money on deposit do you need at Arizona FCU to cover the $36 in annual fees? About $500,000!
Arizona Federal Credit Union fees and rates are extremely uncompetitive. Arizona FCU is not a smarter choice.

Arizona Federal Credit Union pays extremely low, uncompetitive rates on its share savings account, only 0.01%. Once you factor in the unavoidable $3 monthly weasel fees, which come to $36 in yearly fees, you could suffer a huge negative return. In fact, in such a scenario, you might be better off burying your money in the backyard or hiding it under your mattress! As a part of Arizona Federal’s “financial education” program, do they explain how this is a big ripoff?

For example, if you have $100,000 in your share savings account, you would earn 0.01% interest which would be $10 in interest earned for the entire year. Then to experience the phony “Power of Us,” you would be paying $36 in fees, for a loss of $26!

Recap
$10 earned at 0.01% interest for $100,000 in share savings account
-$36 from $3 monthly weasel membership fees x 12 months = $36
= -$26

In order to break even on the annual $36 weasel fees, one would need to have a $360,000 balance in a share savings account!

Recap
$36 earned at 0.01% interest for $360,000 in share savings account
-$36 from $3 monthly weasel membership fees x 12 months = $36
=$0 breakeven

However, one would need MORE THAN $360,000 at 0.01% to break even, because the $36 earned on a $360,000 balance would be before tax! Depending on your tax bracket, it might take $500,000 or more to cover the $36 annual weasel fee. $500,000 x0.01% = $50 interest earned. In a 30% tax bracket, $50 interest earned-$15 in taxes = $35 remaining, after tax.

That same $500,000 at Ally Bank, at 0.84% = 0.0084 would earn $4200 in annual interest!

See this other post for alternatives, many of which are paying far higher than Arizona Federal Credit Union.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/02/arizona-federal-credit-union-offers-the-worst-deal-compared-to-all-competitors-2/

Posted in financials | Tagged , , , , , , , , , , , , | Leave a comment

Arizona Federal Credit Union must reverse course to cancel the $3 monthly membership fee and refund those fees already charged to current and past members.

NEW YORK – SunTrust Bank said on Monday it will stop charging a $5-per-month fee for using debit cards and return the fees it’s collected since June to its customers.

SunTrust cancelled their $5 monthly fee and refunded all previously charged fees. Why can’t Arizona Federal do the right thing and do the same?

http://usatoday30.usatoday.com/money/industries/banking/story/2011-10-31/suntrust-cancels-5-dollar-debit-fee/51015590/1

SunTrust latest to reverse $5 monthly debit card fee
By Eileen Aj Connelly, Associated Press
Updated 10/31/2011 5:16 PM

NEW YORK – SunTrust Bank said on Monday it will stop charging a $5-per-month fee for using debit cards and return the fees it’s collected since June to its customers.

The Atlanta-based bank followed larger rivals like Chase and Wells Fargo in backing off the fees.

The retail banking division of JPMorgan Chase let news leak Friday that it will not expand the $3 monthly fees it is charging in tests in Wisconsin and Georgia when they end in November. Wells Fargo followed with an official end to its testing of a $3 fee in five states, which had started Oct. 14.

Regional bank SunTrust (STI) says it “listened to our clients’ feedback” in making the decision to stop charging the fees.

Bank of America also said it plans to offer ways to avoid the fees through use of services like direct deposit and or maintaining certain balances, but the bank has not officially laid out its policy.

It was news last month that the Charlotte-based Bank of America planned to charge $5 per month for using debit cards for purchases that generated the most reaction among consumers. Even President Obama joined in the criticism.

The widespread anger helped spark a movement that is encouraging bank customers to move their money to credit unions and community banks that don’t charge such fees. “Bank Transfer Day” is slated to take place on Saturday, but neighborhood-based institutions around the country have already reported sharp increases in account openings ahead of the movement’s designated date for switching. Several larger banks, including Citibank, US Bancorp, PNC Financial and TD Bank, have jumped on the issue to highlight that they do not charge debit fees, although they may charge monthly maintenance fees for checking accounts.

Banks pushed the adoption of debit cards in the past decade in part because it is less expensive to handle transactions made with plastic than with cash or paper checks. Debit quickly became popular, and surpassed credit cards as the most popular form of non-cash payment several years ago. Usage has continued to increase as the economy has continued to struggle.

But a new federal regulation that kicked in Oct. 1 cut in half the fees banks could charge to retailers for processing purchases made with debit cards. That came on top of other recent restrictions for charging overdraft fees — which soared with automatic overdraft coverage for debit cards — and tighter rules on credit cards. Banks said they were instituting the debit card fees as a way to make up revenue lost to these new rules.

SunTrust’s announcement leaves only Regions Financial among large banks charging such fees. Regions began charging $4 per month in October.

Posted in angry members, banks, principles, values, listening to members | Tagged , , , , , , , , , , , , , , , , , , , , | Leave a comment

Arizona Federal Credit Union leadership didn’t learn from the mistakes of Bank of America, Chase Bank, Regions Bank, SunTrust Bank, Wells Fargo Bank.

It is often said that if one doesn’t study history, that one is doomed to repeat the mistakes of the past. We give AZFCU an “F” in history.

We present for your review how the banks in 2011 announced $5 monthly debit card fees, then cancelled those plans due to customer outrage. Why can’t Arizona Federal leadership learn from the mistakes of banks or learn from their own members that AZFCU angered by launching an asinine $3 monthly membership fee that is unavoidable?

http://usatoday30.usatoday.com/money/industries/banking/story/2011-09-29/bank-of-america-debit-card-fee/50608896/1

Bank of America joins banks charging monthly debit card fees
By Candice Choi, Associated Press
Updated 9/30/2011 12:20 PM

NEW YORK – Bank of America plans to start charging customers a $5 fee in any month that they use their debit card to make a purchase.

The fee will be rolled out starting early next year.

A number of banks already have either rolled out or are testing such fees. Bank of America’s announcement carries weight because it is the largest U.S. bank, measured by deposits.

Anne Pace, a Bank of America (BAC) spokeswoman, said Thursday that customers will only be charged the fee if they use their debit cards for purchases in a given month. Customers won’t be charged if they only use their cards at an ATM.

The fee will apply to basic accounts and will be in addition to any existing monthly service fees. For example, one of the bank’s basic accounts charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.

A fee for using debit cards is still a novel concept for many consumers and was unheard of before this year. But there are signs it may soon become an industry norm.

SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month.

Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.

The growing prevalence of the debit card fee is alarming for Josh Wood, a 32-year-old financial adviser in Amarillo, Texas.

Wood relies entirely on debit cards to avoid interest charges on a credit card. If his bank, Wells Fargo, began charging a debit card fee, he said he would take his business to a credit union.

If a debit fee became so prevalent that it was unavoidable, Wood said he’s not sure how he’d react.

“I might use all cash. Or go back to writing checks,” he said.

The debit card fee isn’t the only unwelcome change checking account customers are seeing. The banking industry has been raising fees and scaling back rewards programs as they adjust to new regulations that will limit traditional revenue sources.

Starting Oct. 1, a regulation will cap the fees banks can collect from merchants whenever customers swipe their debit cards. Those fees generated $19 billion for banks in 2009, according to the Nilson Report, which tracks the payments industry.

There is no similar cap on fees that banks can collect from merchants when customers use their credit cards, however. That means banks may increasingly encourage customers to reach for their credit cards, reversing a trend toward debit card use in the past several years.

An increasing reliance on credit cards would be particularly beneficial for Bank of America, which is a major credit card issuer, notes Bart Narter, a banking analyst with Celent, a consulting firm.

“It’s become a more profitable business, at least in relation to debit cards,” Narter said.

This summer, an Associated Press-GfK poll found that two-thirds of consumers use debit cards more frequently than credit cards. But when asked how they would react if they were charged a $3 monthly debit card fee, 61% said they would find another way to pay.

If the fee were $5, 66% said they would change their payment method.

Bank of America’s debit card fee will be rolled out in stages starting with select states in early 2012. The company would not say which states would be affected first.

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-11-01/bank-of-america-drops-debit-fees/51026748/1

Bank of America drops debit card fees
By Sandra Block, USA TODAY
Updated 11/1/2011 6:29 PM

Citing customer concerns and a “changing competitive marketplace,” Bank of America said it won’t charge customers a fee for using their debit cards.

Customers use Bank of America ATM machines in Los Angeles after protestors cover the machines with yellow danger tape and protest signs during an anti-Wall Street demonstration.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said David Darnell, co-chief operating officer. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

On Monday, SunTrust and Regions Bank announced that they have abandoned plans to charge customers a debit card fee. On Friday, Wells Fargo announced that it has canceled plans to test a debit card fee in five states.

JPMorgan Chase, which has been testing the fee in two states, has also decided not to extend the fee when it expires this month, according to a source with knowledge of the plan who isn’t authorized to discuss it.

Bank of America’s plan to charge customers $5 a month to use their debit cards sparked a powerful consumer backlash. Even President Obama weighed in, stating the fee pointed up the need for a strong consumer watchdog. Activists have designated Nov. 5 as “Bank Transfer Day” and are urging consumers with accounts at Bank of America and other big banks to switch to a small bank or credit union.

“For many consumers, the Bank of America debit card fee was the last straw,” said Norma Garcia, manager of Consumers Union’s financial services program.

Banks have blamed the new fees on a regulation that slashed the fees financial institutions can charge retailers whenever consumers use their debit cards. The regulation exempted banks and credit unions with assets of less than $10 billion.

While customers will escape debit card fees, banks will likely make up for the lost revenue in other, less visible ways, analysts say. Free checking, for example, is rapidly disappearing. Only 45% of non-interest checking accounts are free, down from 65% in 2010, according to a survey by Bankrate.com.

Banks “will find some way to increase their revenue, and it’s always the consumer that will end up paying for these increases,” says Bill Hardekopf, chief executive of LowCards.com.

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-10-28/chase-debit-card-fees/50980342/1

Chase, Wells Fargo drop plans to charge debit card fees
By Sandra Block, USA TODAY
Updated 10/28/2011 7:49 PM

A month after Bank of America got pummeled by consumers and lawmakers for introducing a monthly debit-card fee, other big banks are backing off plans to charge customers for using their debit cards.

JPMorgan Chase has decided not to charge customers to use their debit cards, according to a source with knowledge of the plans but who isn’t authorized to discuss the matter.

Wells Fargo also announced late Friday that it has cancelled plans to test a debit card fee in five states. “Wells Fargo remains committed to helping our customers succeed financially and we believe this decision is in the best interest of our customers,” a Well Fargo spokesperson said.

In February, Chase launched a pilot program that charged customers in Georgia and Wisconsin a $3 monthly debit card fee. The program will expire in November and Chase doesn’t plan to extend it, according to the source.

Consumers Union applauded the decision and called on Bank of America to rescind its plans to start charging customers a $5 monthly debit card fee, starting in 2012.

“Consumers Union has heard from thousands of consumers across the country who are outraged that Bank of America is instituting the $5 monthly debit card fee,” said Norma Garcia, manager of Consumers Union’s financial services program.

“We always take into consideration feedback we receive from our customers,” a Bank of America spokesperson said in response, “and are committed to being clear and transparent about our fees so that customers understand their options in paying for services and ways they can avoid fees.”

Starting in November, SunTrust, a major regional bank, will charge customers a $5 monthly debit card fee. Regions Financial, based in Birmingham, Ala., has also added a $4 monthly debit card fee. Wells Fargo is testing a $3 monthly fee in some of its markets.

Banks that have raised their fees said a regulation that took effect Oct. 1 left them with no other choice. That regulation cut in half the fees financial institutions can charge retailers whenever consumers use their debit cards for purchases. The regulation exempted banks and credit unions with assets of less than $10 billion.

But other big banks have made of a point of publicizing the fact that they don’t charge a debit card fee. Citibank earlier said it decided not to charge a debit card fee because customers made it clear that they didn’t want to pay for the convenience of using their cards. TD Bank put out a press release Friday stating that it will continue to offer its customers debit cards with no monthly fee.

TD Bank said a survey of its customers revealed that 70% would discontinue their account if the bank charged a debit card fee.

Most small banks and credit unions don’t charge debit card fees. In an effort to attract new deposits, some of those institutions have launched advertising campaigns urging angry customers of big banks to switch accounts.

A grassroots effort on Facebook has designated Nov. 5 “Bank Transfer Day” and is encouraging consumers who are unhappy with new bank fees to move their accounts to credit unions or community banks.

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-10-31/suntrust-drops-debit-card-fees/51018838/1

Two more banks drop monthly debit card fees
By Sandra Block, USA TODAY
Updated 11/1/2011 6:28 PM

SunTrust Bank and Regions Bank have joined the list of banks that have abandoned plans to charge customers a fee for using their debit cards.

Atlanta-based SunTrust said Monday that it has eliminated a $5 monthly debit-card fee scheduled to take effect Nov. 2. Customers who have already paid the fee will be reimbursed, the company said.

“We believe banking is a relationship business and recognize the importance of responding to client preferences,” said Brad Dinsmore, Consumer Banking and Private Wealth Management executive at SunTrust. “We’ve listened to our clients’ feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts.”

Regions Bank, based in Birmingham, Ala., said late Monday that it has also eliminated its $4 monthly debit card fee and will refund fees already paid. “We have heard from our customers and are responding to their feedback by eliminating the monthly fee” for debit cards, John Owen, head of consumer services for Regions Bank, said.

On Friday, Wells Fargo announced that it has canceled plans to test a debit card fee in five states. JPMorgan Chase, which has been testing the fee in two states, has decided not to extend the fee when it expires this month, according to a source with knowledge of the plan who isn’t authorized to discuss it.

Chase is also said to be ending a test of a basic checking account that charged a $15 monthly fee. Chase’s basic bank account currently charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum balance or setting up direct deposit.

Bank of America hasn’t canceled plans to charge a $5 monthly debit card fee that consumers and lawmakers have lambasted it for since the bank announced the fee. Activists have designated Nov. 5 as “Bank Transfer Day” and are urging consumers with accounts at big banks to switch to a small bank or credit union.

“For many consumers, the Bank of America debit card fee was the last straw,” said Norma Garcia, manager of Consumers Union’s financial services program.”

Banks have blamed the new fees on a regulation that took effect Oct. 1 that slashed the fees financial institutions can charge retailers whenever consumers use their debit cards. The regulation exempted banks and credit unions with assets of less than $10 billion.

While most customers will escape debit card fees, banks will likely make up for the lost revenue in other, less visible, ways, analysts say. Free checking, for example, is rapidly disappearing. Only 45% of non-interest checking accounts are free, down from 65% in 2010, according to a survey by Bankrate.com.

Banks “will find some way to increase their revenue, and it’s always the consumer that will end up paying for these increases,” says Bill Hardekopf, chief executive of LowCards.com.

http://usatoday30.usatoday.com/money/industries/banking/story/2011-10-31/suntrust-cancels-5-dollar-debit-fee/51015590/1

SunTrust latest to reverse $5 monthly debit card fee
By Eileen Aj Connelly, Associated Press
Updated 10/31/2011 5:16 PM

NEW YORK – SunTrust Bank said on Monday it will stop charging a $5-per-month fee for using debit cards and return the fees it’s collected since June to its customers.

The Atlanta-based bank followed larger rivals like Chase and Wells Fargo in backing off the fees.

The retail banking division of JPMorgan Chase let news leak Friday that it will not expand the $3 monthly fees it is charging in tests in Wisconsin and Georgia when they end in November. Wells Fargo followed with an official end to its testing of a $3 fee in five states, which had started Oct. 14.

Regional bank SunTrust (STI) says it “listened to our clients’ feedback” in making the decision to stop charging the fees.

Bank of America also said it plans to offer ways to avoid the fees through use of services like direct deposit and or maintaining certain balances, but the bank has not officially laid out its policy.

It was news last month that the Charlotte-based Bank of America planned to charge $5 per month for using debit cards for purchases that generated the most reaction among consumers. Even President Obama joined in the criticism.

The widespread anger helped spark a movement that is encouraging bank customers to move their money to credit unions and community banks that don’t charge such fees. “Bank Transfer Day” is slated to take place on Saturday, but neighborhood-based institutions around the country have already reported sharp increases in account openings ahead of the movement’s designated date for switching. Several larger banks, including Citibank, US Bancorp, PNC Financial and TD Bank, have jumped on the issue to highlight that they do not charge debit fees, although they may charge monthly maintenance fees for checking accounts.

Banks pushed the adoption of debit cards in the past decade in part because it is less expensive to handle transactions made with plastic than with cash or paper checks. Debit quickly became popular, and surpassed credit cards as the most popular form of non-cash payment several years ago. Usage has continued to increase as the economy has continued to struggle.

But a new federal regulation that kicked in Oct. 1 cut in half the fees banks could charge to retailers for processing purchases made with debit cards. That came on top of other recent restrictions for charging overdraft fees — which soared with automatic overdraft coverage for debit cards — and tighter rules on credit cards. Banks said they were instituting the debit card fees as a way to make up revenue lost to these new rules.

SunTrust’s announcement leaves only Regions Financial among large banks charging such fees. Regions began charging $4 per month in October.

http://usatoday30.usatoday.com/money/industries/retail/story/2011-11-01/consumer-backlash/51032364/1

Bank of America fee retraction shows effect of consumer rage
By Bruce Horovitz, USA TODAY
Updated 11/1/2011 8:08 PM

Consumer rage in an electronic age has corporate titans doing something few have so willingly done before: back-pedaling.

Thousands of angry citizens have protested in cities across the world in demonstrations inspired by the Occupy Wall Street protest in New York City.

When Bank of America announced Tuesday that it was nixing its widely panned plan to charge consumers a monthly $5 debit card fee, it joined a handful of other familiar banks that also had back-pedaled. The unusual moves follow a recent, customer-instigated about-face by Netflix, which scrapped plans to split into two businesses and ultimately charge customers more.

“Every company is now sitting on electronic quicksand,” says Howard Rubenstein, the famed New York PR guru. “It may look like solid ground, but one wrong move and you’re up to your chin.”

Some see it as the Occupy Wall Street of the no-longer-silent majority. Most corporations only become aware of the wallop of this emerging consumer power when they make a serious mistake and fall victim to it. This new, power-to-the-grumbler movement is only going to grow.

There’s a considerable price to be paid in damaged reputation — and lost business — to companies that don’t pay heed. Some $58 billion in transactions may be at risk from Americans who had a problem with a product or service purchased within the last year, estimates a study due out today from the W.P. Carey School of Business at Arizona State University.

“Most companies don’t handle problems well,” says Mary Jo Bitner, the business professor who oversaw the study. “And that only gets people more enraged.” Behind the banter:

•Social media explosion. “For the first time ever, the volume of response is now visible because of social media,” branding consultant Martin Lindstrom says.

For example, Consumers Union reached out to 780,000 people on its opt-in list following the original BofA debit card fee announcement, and some 40,000 of them asked for a congressional investigation into the fees, says Norma Garcia, manager of the watchdog group’s financial services program. “The bigger message is: consumers matter,” she says.

•Frustrated consumers. The sheer number of people experiencing serious problems with companies, products or services keeps growing, Bitner says. The figure, which should be declining, she says, instead ballooned this year to 45% of consumers from 32% in 1976.

•A chance to matter. Many consumers are anxious about their jobs; angry about their salaries and increased workloads; upset about climbing health care costs; and worried about their mortgages, notes Bitner. She says there’s still one thing under their control: the chance to speak out.

Posted in angry members, banks, competition, principles, values, listening to members | Tagged , , , , , , , , , , , , , | Leave a comment

Arizona Federal has misleadingly deceptive propaganda on its website in an attempt to justify its wrongful fee.

Why does Arizona Federal knock banks for a $5 debit card fee that doesn't even exist, in an attempt to justify AZFCU's greedy $3 monthly membership fee??

Why does Arizona Federal knock banks for a $5 debit card fee that doesn’t even exist, in an attempt to justify AZFCU’s greedy $3 monthly membership fee?? Click image to enlarge for easier reading.

Isn’t it ironic that Arizona Federal knocks Bank of America, Chase, and Wells Fargo for $5 monthly debit card fees, which the banks announced in 2011 and quickly retracted in 2011, yet Arizona FCU instituted a $3 monthly fee simply for being a credit union member, even if one does not have a debit card? Why does Arizona Federal have this statement on their website about the banks having a $5 debit card fee when most of the banks cancelled that fee before it began? Is it an attempt for AZFCU to attempt to justify their wrongful $3 fee, not even for having an AZFCU debit card, but just for being a credit union member?

In addition, the page states the banks’ 2011 proposed $5 fee would have been avoidable if one does not use the debit card. In contrast, the monthly $3 weasel fee at AZFCU is not avoidable unless you close your membership completely! Why does AZFCU want to distinguish itself as being a worse deal than banks? Credit unions have often promoted themselves as offering BETTER deals on rates and loans than banks since credit unions are member-owned. That is not the case with Arizona FCU.

Here is the September 2011 article in USA Today announcing Bank of America’s plan to begin charging $5 monthly for using their debit card:

http://usatoday30.usatoday.com/money/industries/banking/story/2011-09-29/bank-of-america-debit-card-fee/50608896/1

Here are the articles in USA Today announcing the banks were cancelling the ill-advised program to charge a $5 monthly debit card fee.

October 28, 2011, Chase and Wells Fargo dropped their plans to begin charging a $5 monthly fee for use their debit cards:

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-10-28/chase-debit-card-fees/50980342/1

November 1, 2011, Bank of America dropped their plan to begin charging a $5 monthly fee for using their debit cards:

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-11-01/bank-of-america-drops-debit-fees/51026748/1

November 1, 2011, Suntrust and Regions Bank dropped their plans to begin charging a $5 monthly fee for using their debit cards:

http://usatoday30.usatoday.com/money/perfi/credit/story/2011-10-31/suntrust-drops-debit-card-fees/51018838/1

But other big banks have made of a point of publicizing the fact that they don’t charge a debit card fee. Citibank earlier said it decided not to charge a debit card fee because customers made it clear that they didn’t want to pay for the convenience of using their cards. TD Bank put out a press release Friday stating that it will continue to offer its customers debit cards with no monthly fee.

TD Bank said a survey of its customers revealed that 70% would discontinue their account if the bank charged a debit card fee.

Most small banks and credit unions don’t charge debit card fees. In an effort to attract new deposits, some of those institutions have launched advertising campaigns urging angry customers of big banks to switch accounts.

A grassroots effort on Facebook has designated Nov. 5 “Bank Transfer Day” and is encouraging consumers who are unhappy with new bank fees to move their accounts to credit unions or community banks.


The 2011 proposed excessive $5 monthly debit card fees by the banks were cancelled because consumers rebelled against the greedy fees, causing thousands of bank customers to choose a credit union instead. Why is AZFCU leadership tone deaf to its members? An unavoidable monthly $3 weasel fee is NEVER acceptable. It is unbelievable that we even need to have this conversation, but we do because of how Arizona Federal has blundered. Fees should only be charged for members’ using particular services, with a way to avoid them. TruWest Credit Union has expressed the correct way to do this when they said:

    http://www.truwest.org/html/feeguidelines

    In regards to fees, TruWest believes that the entire membership should not finance the costs of products or services that only a small portion of the membership uses. Fees are intended to offset the costs associated with a product or service, not to increase the Credit Union’s income. TruWest uses fees to influence member behavior patterns and product selection. Fees are also used to reduce adverse and costly member practices, such as routinely writing checks against insufficient funds. TruWest’s fee programs are designed in such a way that the membership can employ fee “avoidance” or fee “alternative” techniques.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/20/arizona-federal-credit-unions-competing-credit-unions-with-arizona-branch-locations-how-do-they-feel-about-their-members/

Now, compare what we have highlighted from TruWest Credit Union, above, to Arizona Federal Credit Union bashing the banks for a $5 monthly debit card fee, below. It’s hypocritical and dishonest for AZFCU to be charging a $3 monthly membership fee while having a page on their website bashing banks for a $5 debit card fee that doesn’t exist:

https://www.arizonafederal.org/checking/debitcardarticle

Charge a fee to use your debit card? Not us!

As reported by USA Today, The Washington Post and other news agencies, Bank of America announced today that beginning early next year they will charge their customers a $5 monthly fee if they use their debit cards to make purchases. This follows previous announcements by other large banks (including Wells Fargo & Co., JPMorgan Chase & Co. and others) that they are either testing or fully rolling out monthly debit card fees.

Why does AZFCU have this message on its website, from a USA Today article in 2011, when those banks came to their senses, reversed course, and cancelled the $5 monthly debit card fee?

These fees, which are in addition to monthly fees the banks already charge to their checking customers, will be assessed to any cardholder who uses the bank’s debit card for even a single purchase during a monthly billing cycle. But don’t worry, the experts say there’s a way to avoid the fee: make no purchases using the card. None.

At Arizona Federal, there are no such plans. Rather, we encourage members to use their debit cards for all of their purchases, with no fear of being assessed a debit card fee. We recently even rewarded one of our members with a free trip to Disneyland as the result of a drawing that included everyone who had made a certain type of purchase with an Arizona Federal debit card in the previous six weeks. Use their card, pay a fee; use ours, go to the Happiest Place on Earth!

Charge the members almost $6 million annually from $3 monthly, which is $36 annually, in weasel fees, then brag about giving away 1 free trip to Disneyland and the members should be happy with that? Why not give us some “financial education” that you claim to offer to remind the members that most credit unions and banks offer better rates but without an unavoidable $3 fee charged every month, simply for being a member.

So, why, when everyone else seems to be charging more for the same service, are we increasing the value of our checking account by adding a comprehensive identity protection package as a standard feature while charging one of the lowest monthly fees anywhere? (See a cost comparison of checking accounts in the Valley.)

A better question is, why, when everyone else seems to not have an unavoidable $3 monthly membership fee, that AZFCU wants to be greedy and punish members for being members?

It’s simple: at Arizona Federal, there’s no “we” (the institution) or “you” (the customer); there’s just “us”. This is a financial cooperative, a group of people who have banded together to provide each other with affordable financial services within the context of mutually-beneficial relationships. When one of us uses a credit union debit card to make a purchase, it benefits all of us in the form of a fee collected from the merchant, and because we keep our overhead low, that’s more than enough to cover our cost.

Wrong. AZFCU fatcats are taking $3 every month from US. That is not mutually beneficial. Many other banks and credit unions offer rewards directly or indirectly for using a credit card or debit card to make purchases. The only thing “special” that AZFCU is “offering” is a monthly $3 ripoff fee.

So, we beg to differ with the experts. You don’t have to quit using a debit card to avoid paying a fee. You just have to use the right debit card. Your Arizona Federal debit card. The card you get from us.

We beg to differ with Arizona Federal. You have to avoid being a member completely with Arizona Federal to avoid paying a fee, because they punish their members $3 every month with an unavoidable monthly $3 weasel fee, whether you have a debit card or not. Arizona Federal claims their debit card is better when they say “you don’t have to quit using a debit card to avoid paying a fee.” Yet Arizona Federal won’t let you avoid paying a monthly $3 weasel fee, even if you don’t have a debit card with them, and only have a basic share savings account!

Posted in angry members, banks, competition, principles, values, listening to members | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

Arizona Federal Credit Union, Arizona Federal, AZFCU, AZFCU.org Who owns a credit union?

A credit union, by the nature of its organizational structure, is owned by the members. Each member is an equal owner, regardless of their balance size, length of membership, account activity. So if you have $25 in your account and Ronald L. Westad, President of the credit union, has over $100,000 in his account, he is not an owner any more than you! Instead, you are both equal owners, each owning 1 share of the credit union. Whereas banks are usually owned by stockholders, a credit union is owned by the people who are members of that credit union. Since the members own the credit union, the employees, such as Mr. Westad, should be working for the member-owners, not against them. Did Mr. Westad forget who owns the credit union?

If you are a part or full owner of an organization, and you are unhappy with the performance of your employee(s), what are you going to do about it? If your employees are not behaving properly, are not working in your interest, or are stealing from you, what are you going to do about it?

Posted in angry members, principles, values, listening to members | Tagged , , , , , , , , , , , , , , , , | 4 Comments

Arizona Federal Credit Union – Mutually beneficial? For whom? Ronald L. Westad?

Arizona FCU says they paid out a $3 million bonus to a little over 77,000 members in December 2012. They also show they had Net Income, or earnings, of about $45 million, in 2012. There were almost 162,000 members as of December 31, 2012. Basic math says 162,000 total members – 77,000 members who received a payout = 85,000 members who did not receive a payout. This means that 85,000 members, or approximately 52%, did not mutually benefit from the payout because they received nothing. Would a majority of the members, who pay in $36 every year, but get no year end bonus payout, truly think this program is mutually beneficial?

How much was President/CEO Ronald L. Westad’s PLUs payout in December 2012?

Those in power should not be allowed to pass laws or rules that unfairly and disproportionately benefit themselves at the expense of the little people. In such instances, it is Robin Hood in reverse, the rich stealing from the poor. Are the Board of Directors his “Merry men and women?”

http://en.wikipedia.org/wiki/Robin_Hood

Do the required, unavoidable, $3 weasel fees charged every month fit Ronald L. Westad’s principles, values, and beliefs? Just what are his principles, values, and beliefs in 2013? They sure look different than he stated they were in 2003.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/11/in-2003-ron-westad-spoke-about-his-personal-values-and-beliefs-it-wasnt-a-matter-of-how-much-could-we-make-or-how-much-could-we-charge-members/

Posted in angry members, principles, values, listening to members, profits and losses, Ronald L. Westad | Tagged , , , , , , , | Leave a comment

Credit Union industry slams unfettered greed of Arizona Federal Credit Union, which damages the “credit union” name

http://www.cutimes.com/2013/05/02/arizona-fcus-membership-fee-breaks-new-ground-some

Arizona FCU’s Membership Fee Breaks New Ground, Some Members Flee

By Peter Strozniak

May 2, 2013

  • Arizona      FCU loses 15,000 members because of new fee.
  • Aimed      at building primary loyalty, credit union contends the strategy is      working.
  • Critics      say fee runs counter to credit union ethos.

Although there are more than 93 million credit union members, only 40 million use a credit union as their primary financial institution. So is there any way to convince the remaining 53 million members to bank at a credit union for their day-to-day financial needs?

It severely damages the credit union movement when one credit union tries to be more greedy than not only all other credit unions, but also more greedy than most banks with their uncalled for, unavoidable, $3 monthly membership fee.  How is that going to convince potential members that a credit union is the place to be?  Did Ron Westad, CEO of Arizona FCU, ask Ron Johnson, ex-CEO of JC Penney, for tips on how JC Penney’s revenues dropped 25% and how to anger customers?  If one examines the precipitous decline in Total Assets and Total Members at Arizona FCU, one might wonder why Ron Westad still has a job?  When did running off members , destroying goodwill, and damaging the brand become a wise management move?

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/08/arizona-federal-you-dont-shrink-your-way-to-greatness-click-on-folder-icon-in-lower-right-to-expand-file/

The $1.2 billion Arizona Federal Credit Union in Phoenix said it is the first financial services cooperative to try a new but controversial solution to this long-standing industry-wide dilemma: Require all of your members to pay a monthly membership fee.

Since the $3 a month membership dues requirement was announced in last December, about 15,000 members closed their accounts, and some of them expressed their anger over the new fee on Facebook. Other members sent letters, emails and made calls to the credit union. Even though the membership decline was expected, the credit union contends its new strategy is working.

The new strategy is working?  Did not listening to customers work for JC Penney?  If angering your member-owner or customer base is the goal, then Arizona FCU has succeeded.  If making credit unions appear to be greediest financial institution, then Arizona FCU has succeeded.  If damaging the goodwill of Arizona FCU is the goal, then they have succeeded.  How soon before Harvard Business Review does a case study of one of the most destructive business decisions of a financial institution?

However, industry experts said Arizona FCU’s membership fee contradicts what credit unions are all about. Moreover, they also don’t like the idea of charging a membership fee to people who have already contributed capital to the credit union when they opened an account to become members.

The idea that credit unions serve people of modest means and care for their communities matters not to Ron Westad, who dumped his values and beliefs, along with 15,000+ members, under the bus.   Is Ron Westad more concerned with the metrics that these ripoff fees will mean to his bonus?  Did the Board of Directors structure his bonus solely on average fee income per member, while completely ignoring total assets, number of members served, and reputation in the community?  What happens to an organization when they focus solely on the short-term instead of the long-term?

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/11/in-2003-ron-westad-spoke-about-his-personal-values-and-beliefs-it-wasnt-a-matter-of-how-much-could-we-make-or-how-much-could-we-charge-members/

So why did Arizona FCU decide to charge a new membership fee when consumers, fed up with too many commercial bank fees, were motivated in droves to join credit unions over the last two years?

“Our entire purpose in doing this is to increase the percentage of members to actively use the services of the credit union and contribute to the cooperative,” said Steve Kelley, senior director of marketing. “We think [it is] an application of one of the seven cooperatives principles, members’ economic participation, [which] says members contribute to the capital of the organization, and this is an opportunity for our members to do that, to invest in the credit union and stand to reap the benefit of the returns that come from that investment.”

How is running off over 15,000 members causing them to use the credit union more?  A non-member will not be doing ANY business with the credit union.  Did Steve Kelley copy the playbook of the laughable Iraqi Information Minister with his tall tales? 

http://en.wikipedia.org/wiki/Muhammad_Saeed_al-Sahhaf

http://www.welovetheiraqiinformationminister.com

His last public appearance as Information Minister was on April 8, 2003, when he said that the Americans “are going to surrender or be burned in their tanks. They will surrender, it is they who will surrender.  I triple guarantee you, there are no American soldiers in Baghdad.  We are winning!”

Arizona FCU contends its membership fee is one solution that is addressing the credit union industry’s longstanding challenge of how to increase profitable members.

Wrong.  This greedy unavoidable monthly fee is running off members, many of which will never return when they seek loans.   Why not make the monthly membership fee $30 per month?  Why stop at $3 per month?  Wouldn’t that make Arizona FCU even more profitable and Ron Westad’s bonus even higher than with a “mere” $3 monthly membership fee?

“Our goal was that [members] would start using services that brought them at least $3 in value, or that they would go ahead and close their membership so that in one way or another, the rest of the members weren’t continuing to carry the load on their behalf,” he said. “So far, that is what we see happening.”

How is charging members $3 per month going to make them feel better about the credit union and want to do more business with Arizona FCU?  Terrible service, terrible rates, fewer branch locations, now adding a monthly $3 weasel fee is going to build member loyalty?

About 25% of the credit union’s members are profitable. The credit union is financially sound, reporting a net income of $44 million in 2012 and $45 million in 2011. It also has lifted its net worth to assets ratio from 6.43% in 2011 to 9.73% in 2012, according to NCUA financial performance reports.

But Dennis Witherspoon, a bank and credit union executive for nearly 30 years, said the membership fee is not consistent with the credit union movement.

“What they are doing is treating this like a for-profit business, and they are chasing out those members that are not profitable,” said Witherspoon, an associate professor of finance at Northwood University in Midland, Mich. “The credit union is saying we don’t want that kind of [unprofitable] member anymore. We just want members that we are going to make money off of. That goes against the grain of the credit union movement, which is to be there for all members regardless of financial wealth.”

While we agree with Witherspoon, it shouldn’t take a professor of finance to say that the members know the $3 monthly weasel fee is an outrage.  Tell us again why credit unions have a tax exemption?  Isn’t it in large part because credit unions serve people of modest means in their communities? 

Credit union industry consultant Tom Glatt Jr. said the membership fee is an interesting but punitive attempt to change behavior of members.

“Regardless, I can see how [the credit union] could argue that it needs to do this to conform members to active relationships,” observed Glatt. “But the fact that they had so many members close their accounts is telling, and I also think it is not a credit union friendly solution.”

He also questioned the wisdom of charging a fee for the privilege of membership when members have already contributed capital to open their accounts when they joined the credit union.

Compare and contrast how other credit unions feel about their members.  We would like to salute TruWest Credit Union for taking the correct approach.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/20/arizona-federal-credit-unions-competing-credit-unions-with-arizona-branch-locations-how-do-they-feel-about-their-members/

“In regards to fees, TruWest believes that the entire membership should not finance the costs of products or services that only a small portion of the membership uses. Fees are intended to offset the costs associated with a product or service, not to increase the Credit Union’s income. TruWest uses fees to influence member behavior patterns and product selection. Fees are also used to reduce adverse and costly member practices, such as routinely writing checks against insufficient funds. TruWest’s fee programs are designed in such a way that the membership can employ fee “avoidance” or fee “alternative” techniques.”

“I don’t particularly like the idea,” he said. “I understand why they are doing it. I think they can find a better solution, in my opinion.”

Arizona FCU launched its $3 membership fee policy last August at one branch and rolled it out to another of its 14 locations every two weeks. When new members signed up at branches, they were informed about the cooperative business model, that in addition to receiving lower priced products and services, members would receive free identity theft protection and restoration services by opening a checking account with an issued-at-the-branch debit card.

New members were also told they could share in credit union dividends at the end of the year based on their relationship with the credit union and its net profitability at the end of the year. Arizona FCU distributed $3 million to 77,000 of its then 161,965 members. Every member received a base dividend payment of $12.82, but the average dividend payment totaled $38. Some members received several hundred dollars.

Many members received no bonus at all.  How can you say every member received at least $12.82, immediately after stating that $3 million was distributed to 77,000 of 161,965 members?  161,965 total members – 77,000 members who received a bonus = 84,965 members that did not get any bonus. 

Currently, the credit union said its membership stands at a little over 152,000 but expects the membership losses to stabilize. It said it has been gaining 1,000 to 1,500 new members every month. Though the credit union insists the membership fee is not a revenue play, it will generate $5.4 million annually at its current membership level.

Despite the denials by Kelley, this is a “fee them up” strategy.  If you look at the growth in fee income per member, it will be plain to see.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/08/arizona-federal-you-dont-shrink-your-way-to-greatness-click-on-folder-icon-in-lower-right-to-expand-file/

Kelley said the new member acceptance rate of paying the $3 membership fee is more than 80%, and less than 20% rejected joining because of the fee.

We have no way of verifying this.  However, based on other statements by Kelley, we call into question how he tries to spin the issue.

“For folks who take time to do the math, when they take a look at that and say who else that I’m doing business with is going to pay me back when they have a surplus at the end of the year….[the $3 membership fee[ makes sense,” Kelley said.

For folks who take time to see that there are many competing financial institutions with far better service and rates, with no required $3 monthly weasel fee, they will also leave Arizona Federal Credit Union.

http://arizonafederalcreditunionmembers.wordpress.com/2013/04/08/arizona-federal-credit-union-has-some-of-the-highest-most-excessive-fees/

But when Arizona FCU announced the new membership fee in December, it didn’t make sense to some members, including members who joined the credit union 10 or 20 years ago.

“It’s unfortunate, but you will be losing at least one customer that you had for at least 20 years,” wrote member Christina Koehn on the credit union’s Facebook page. “And in those 20 years, I’ve only earned interest income (like a bank), not ‘excess income.’” The attraction of your institution was no fees. Now that will go away.”

“Personally, the credit union responses in an attempt to justify the fee have only made me more confident moving my money is the way to go! It is sad as I have also been with AZFCU over 20 years!” member Jacque Torbyn Reeves wrote on Facebook.

Among the 12 members who posted comments on Facebook, 10 said they would close their accounts, one was neutral and only one was positive.

This is incorrect.  Credit Union Times said they found 12 comments that were not deleted by Arizona FCU.  Many members that posted comments to Arizona FCU’s Facebook page had their comments censored by being deleted by Arizona FCU.

“I love Arizona Federal credit union and I think that the 3.00 a month membership fee is very reasonable for the personalized service they offer,” wrote member Valerie Long Kurth.

In January, when Arizona FCU announced that it had distributed $3 million in dividend payments, five members expressed thanks, but 10 credit union members were not so appreciative.

“Here’s $12 (dividend payment) but we’re going to start charging you $3 a month which amounts to $36 a year, so really your members are paying you,” wrote member Laure Altenes. “Too many choices out there with credit unions and banks for that matter that as long as you have direct deposit of at least $250 a month will not charge you. Bye Bye AZFCU!!!!”

AZFCU did not censor any Facebook posts and responded to several of them explaining its rationale behind the fee.

What is the basis for writing that “AZFCU did not censor any Facebook posts?”  A great many comments were deleted by Arizona FCU!  Do you not consider a deleted post a censored post?  The members who had their posts deleted felt they were censored!

Nevertheless, Witherspoon questioned whether the loss of thousands of members and the negative public relations in the credit union’s marketplace would be worth it.

“Once you lose that favorite status with your members, once you lose that feel-good [status] about your credit union, it’s hard to get that back,” Witherspoon said.

Witherspoon is far smarter on this issue than Westad.  Maybe Arizona FCU should hire him as Westad’s replacement.

Posted in angry members, principles, values, listening to members | Tagged , , , , , , , , , , , , , , , , , , , | Leave a comment