Despite claims to the contrary, Arizona Federal has a “fee them up” strategy

Since 2007, as fee income per member went up 64%, it should come as no surprise that members declined by 39%.  Did management salaries go down in proportion to the poor performance or did President Ronald Westad get a raise and bonus?  The biggest changes happened in 2013, as AZ FCU added $36 in annual fees, over 27,000 members left that year.

Running off members, intentionally, is a bad strategy because there are fewer members supporting the overhead, and a loss of economies of scale.  That is a key reason why smaller credit unions are merging out of existence.  In addition, fewer members means you will have fewer future borrowers, which leads to a smaller loan portfolio, which leads to lower profitability.

Kicking poorer, younger members to the curb is a short-sighted strategy, akin to getting rid of all your baby chickens because they are not producing eggs.  What happens in the future is obvious.  Baby chickens grow into big chickens and begin laying eggs, at which point they are more productive.  AZ FCU management, with their unavoidable $3 monthly fees, has sent thousands of future borrowers to other credit unions.  Those members won’t forget what Arizona Federal did to them.

Smart members go where they are not hit with excessive fees.  Only the less informed members stay at AZ FCU, or those too lazy to switch to a more caring credit union.

AZ FCU fee income per member went up while members went down

AZ FCU fee income per member went up while members went down

Fiscal Year ending FEE INCOME PER MEMBER MEMBERS
2007 $110 221,625
2008 $132 224,865
2009 $135 206,563
2010 $139 185,681
2011 $150 171,825
2012 $148 161,965
2013 $180 135,288
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About Arizona Federal Credit Union Members United

Arizona Federal Credit Union Members United is a group of over 100 members and former members who care about our credit union being run fairly. The leadership of the credit union has failed to represent us properly by enacting a new and unnecessary, unavoidable, unconscionable, $3 monthly membership fee that we did not want. The members did not ask for this. Before implementing such a counter-productive fee, the proposal should have been put up for a vote to all the members to decide, so the will of the people is followed. The member-owners of Arizona FCU should not be taxed $3 monthly, simply for being a member. We want all the $3 monthly member fees refunded to all current and past members, the elimination of the fee going forward, and the elimination of the $25 rejoining fee. We are against any financial institution charging an unavoidable ongoing membership fee, simply for being a member. This is the wrong approach. Members and customers should be valued, not punished. We want to see Arizona FCU succeed, not fail. Imposing unfair policies that are detrimental to the long-run success of the credit union and detrimental to society should be abolished.
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