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September 19th, 2010

Why I’m switching banks

Two weeks ago, my wife and I had a number of accounts spread between two providers: our local credit union and ING Direct (originally, we had accounts with NetBank, which was absorbed by ING a few years ago). But, now, we’re in the process of switching everything over to Ally Bank. Here’s the series of events that lead to my insistence on switching:

  1. I notice that our local credit union charged both my wife and I $5 in overdraft transfer fees. We’ve belong to the credit union since our freshman year of college 16 years ago and have never been charged this fee. In fact, one of the reasons we stayed with our credit union even though their rates aren’t the best is because they offered free overdraft transfer protection, meaning that if our checking account didn’t have enough money in it to pay a bill or cash a check, it would automatically be transferred from our savings account with no charge (up to six times a month). We made heavy use of this because it allowed us to keep money primarily in our savings account, earning interest, and then when a bill needed to be paid from checking, it would automatically transfer the needed amount of money over. So, this fee threw us off and made us (or at least me) pretty angry.
  2. I wrote to our credit union about this fee and told them that I disagreed with it because a.) they’ve never charged this fee before and b.) there’s no reason they should because there’s no overhead to them and it’s our money just shifting from one account to another. I also asked for them to credit back the $10 in fees.
  3. They replied and said, basically, “Sorry. We announced it in our monthly newsletter [that no one reads].” And they wouldn’t credit the $10 back. So, because of this silly fee they insist on charging, they’re losing two customers they’ve had for close to two decades.
  4. While we’ve been OK with ING, we noticed that Ally’s rates were great (and, of course, they offer free overdraft transfers).

So, we’re now in the process of transferring all of our money from ING and almost all of our money from the credit union as well as updating all of the autopays. We’re living a little money at the credit union for any outstanding checks or autopays that we forget about. I should also note that this marks the first time my wife and I are consolidating our individual accounts. I know, I know… we’ve been married nine years… probably should have done it sooner.

I guess the takeaway for this, if you’re a credit union trying to serve your members well is: 1.) don’t introduce stupid fees just because you can (especially without getting the opinions of your members, who are basically stockholders), 2.) offer better rates on your accounts if you want to compete with online-only banks, and 3.) offer more ATMs.

Oh, yeah, so that last one… our credit union doesn’t have any of their ATMs within 90 minutes of us. And it’s almost impossible to find an ATM where we’d be able to withdraw money without getting charged by our credit union or the owner of the ATM. Ally? Not only do they not charge at any ATM, they pay the other banks’ fees. So, essentially, any ATM is free to use. That’s the way it should be done, folks.

Posted in Consumer Commentary

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