When Your Credit Union Wants to Be Your Bank

How do you know when your credit union wants to be your bank? When they start to suck.

I have been "banking" with Har-Co Credit Union in Harford County since the first semester of my freshman year at Harford Community College (way back in the olden days). Previously I was at Equitable Bank, which got bought by Maryland National Bank, which spun off MBNA when it got into financial trouble, then spiralled out of control until NationsBank bought them. At that point I had had enough. Off to the credit union I went.

The credit union was nice. No fees on ATM withdrawals, interest on my checking and savings, free checks. Then Bill Clinton became President. I'm not sure that he caused the change, but I can't think of anyone else to blame so it might as well be him.

Dropped from Har-Co's amenities were interest on checking and free checks. They even spun it as if it were a good thins. "Interest-free checking!" Yay! I get to lend you my money and you give me nothing in return! What a great deal! Then Har-Co initiated an account restructuring, basically a caste system amongst is members. If you were poor, you got cut from the free services. If you were rich, you paid a $12 per month charge and got checks for free, which cost me $24 per year. So instead of paying $144 per year in charges and getting checks for free, I decided to pay $24 per year for checks. I even asked one of their call center representatives to make sure I understood that correctly. She paused and said my analysis was correct. I think she was pissed that I figured it out.

However, one feature that I did like was for overdraft protection. They would move money from savings to cover checks that were trying to clear your checking account when you didn't have sufficient funds in that account. However, when this happens they charge you $5.00. In addition to this feature, you could also have Har-Co send you alert messages when your balance went below a certain threshold. I chose $500. Whenever my balance went below $500 in checking, an email would be sent to me.

Yesterday I got one of those emails. I quickly logged on to my account and much to my surprise my account was plastered with $5 transfer fees. Apparently I had 3 transactions processed on my account when there were insufficient funds in checking. Now, nearly all of my bill-paying is done with electronic transactions. They must know that these transactions are queued up. So I'm pretty sure within a matter of 1.8 seconds all 3 transactions were processed and the cumulative $15 in fees were posted. Couldn't they sum the outstanding transactions and move sufficient funds at once? Seriously - $15 is more than the cumulative interest I'd earn on my savings account over the next 5 years. (do you really need to advertise that you offer annual 0.1% interest on your savings accounts?)

Furthermore, these transactions occurred on the previous day. So the email alert that I had less than $500 in checking was useless. Basically it says, "Hi, you had insufficient funds in your account yesterday and if you log on to your account you'll see all of your penalty charges. ha-ha! Have a nice day."

I called customer service and requested that 2 of the 3 $5 fees be waived. I think one penalty was fair. All 3? Not really. Unfortunately, I was basically told that I'm an idiot and that the transactions are handled by a company called PFM (Personal Financial Management) and this company has no interest in maintaining good customer relations. If you get a fee, it's you're own damn fault.

I know what you're thinking. If I had my account in one of those nasty banks headquartered in Pittsburgh or Charlotte, I would have had several hundred dollars in fees and penalties. Bank of America most likely would have foreclosed on my mortgage, even though they do not hold my mortgage. PNC would have repossessed my car.

The best part of this is that Har-Co has recently requested permission to convert from a credit you union to a savings bank. They claim that it will allow them to better serve their customers. We all know this is a bunch of crap. It's a shallow attempt at generating more revenue with higher fees, stricter requirements, and less customer service, in addition to less friendly customer service. So while I'm complaining now, I can only expect this to get worse.

Perhaps I should investigate moving my money to the Bank of Coffee Can.