By Christian Mullins
The first decade of the new millennium is winding down. Now that we’re on the verge of moving into the teens, it’s worthwhile to investigate the possibility that your credit union may have a few outdated, dusty accounts and services that no longer serve your membership as well as they once did. In most cases better alternatives already exist, though the ultimate question of whether they’re modified, toned down, or retired is up to you, and more importantly, your members.
Touch Tone Teller
This is not a reference to mobile or text banking, but it’s 1980′s era predecessor. There was a time, before widespread use of the internet, that members called a phone number, entered their member number and PIN, and listened to their last few deposits, withdrawals, checks cleared, and balances. Online banking dealt a severe blow to its popularity 10-12 years ago, but it endured, thanks in part to those that didn’t own a computer or have access to the internet. Today, mobile banking is increasingly commonplace, online banking continues to grow across all demographics, and a growing percentage of credit unions have discontinued the service. It’s time to bid a fond farewell to the rotary phone of credit union account access.
Fixed Term Certificates
Most credit unions offer, at a minimum, 6, 12, and 24 month certificates. Some financial institutions, realizing lost investments because an individual’s needs don’t match the certificate’s term, are starting to offer certificate ranges, allowing the investor to select the maturity date, with the Annual Percentage Yield remaining fixed for any period within the prescribed range. Greater flexibility, even at the same rate, adds perceived value, and since most if not all software systems allow the operator to enter the maturity date, this modification is a no-brainer.
There was a time when they were a necessity for any vacation, but that day has come and gone. They may still provide a sense of security for some travelers, but today’s vacationer brings an assortment of cash and plastic, and unless traveling alone, their companion(s) likely have their own means of payment as well. As a result, travelers checks aren’t the security blanket they once were. If they’re being sold regularly at your credit union then by all means accommodate your membership, but if an audit is the only time the checks see the light of day, it’s time to scale back if not discontinue them completely.
Now we’re moving into the “let’s watch how this plays out” department. Most credit unions charge a $15-20 outgoing wire fee. There are other faster options available, but none of them, including shared branching (small population penetration), cashiers checks (snail mail), and Western Union (expensive) are ideal alternatives in most situations. However, WalMart is starting to advertise inexpensive transfer rates and a 10 minute turnaround time to almost any WalMart (or MoneyGram) location. Undercutting local pricing to gain market share is a WalMart tradition, but there’s no reason why your member shouldn’t take advantage of that opportunity. In many cases, the member would be better served with a wire transfer, but a call to WalMart may save your member a few dollars and build some goodwill at the same time.
Health Savings Accounts (HSAs)
We’re straying into the political here, but our stay will be brief and, hopefully, not political. There are some who believe that if the Health Care Reform Bill (.pdf) is passed as written it will negate the need for HSAs. If your credit union already offers HSAs, there’s no need to do anything but watch and wait, but if you’re planning an HSA program, you may best serve your members by watching and waiting as well. Congressional bills rarely look the same when passed as they did when they were introduced, and there’s no guarantee that this bill will be passed at all. The discontinuation of HSAs is only speculation at this point, but any overhaul of the health care system will likely extend to supplemental products and services, and HSAs fall into that definition.
Every credit union has a unique membership with unique needs. What may be obsolete at one credit union is essential at another, making a standardized set of accounts and services unrealistic. Striving to offer the best package of accounts and services, whether it’s modifying an account or shaving one service to provide another will add benefit to your membership while remaining competitive in the marketplace.