Conference 7.286::dcu

    Re .0
    
    What do you mean by "raised the minimum balance requirement for
    checking from $500 to $1000"?  I assume that means raised the minimum
    balance necessary to earn interest.
    
    Larry
    

    I thought that one of the advantages of a credit union was to get
    better service and benefits than at a regular bank.  If the DCU
    is going to continually make it cost us more, then where is the
    incentive to use their services?  Their checking is now just about
    the same as a regular bank's checking.  The way it looks to me,
    they lowered the minimum really low to get people to open checking
    accounts, and were sure to make everyone know that they lowered
    the minimum.  Then, after they had gotten alot of checking accounts
    opened, they raised the minimum to $1000, being sure to keep it
    as secret as they possibly could.  This sounds more sneaky than
    I would ever want to see them be.  Where are our reps on the board?
     I thought they were supposed to be stopping stuff like this?  It
    is not like we get any great interest rates on the loans, only average.
    
    I am REALLY disappointed in the way that they have been acting.
    

    Has anyone seen any statement in any of DCU's newsletters stating
    that the minimum was going up to $1000?  If so, where was this
    stated?  If I recall correctly, when they raised the minimum to
    $500 they did not put that in print.
    
    Don

Spoke to John Tilley this morning.  Indeed, the minimum balance has 
been raised.  Just like 2 years ago, when they raised the minimum
balance from 0 to $500, he explained that they were not required to
provide advance notice, but apologized that such notice had not been
given - apparently the B.O.D. implemented the policy changevery soon
after deciding it (Sept. 1).  He defended the change as follows:  DCU
members are perceived to be more interested in full service than top
interest rates.  Thus, DCU is building more branches, planting more
ATMs, developing more services (a credit card is due this fall,
possibly no-fee), rather than just pumping earnings back to the
members in the form of lower loan rates and higher savings rates.
Changing the minimum balance gives them more working capital.  They
still believe they are quite competitive because they charge no
service fees on low balances, or on individual checks or deposits
(other than ATM fees, which they don't collect). [John - if you're
reading this, I hope i'm being fair and objective].

One depositors opinion (mine):

Personally, I'm not a heavy 'services' user, so I'm unhappy about the 
increase, though some spot checking revealed (to my surprise) that 
their deal is still quite good (does DCU really <still> have the best 
deal on a checking account?)  

I can't accept the lack of notice.  They could have at least posted 
the change at branches.  This is the type of move (I believe) that
creates a lot of ill will.  Another real bad P.R. move on the part of
DCU. 

        Re: .5 -- Did you run for election to the BoD during the last
        election?  Did you even vote?  Do you honestly think you could
        get enough signatures on a petition to recall the existing
        BoD?  Wake up and smell the coffee..
        
        If you're not pleased with the way the DCU is going, contact
        the BoD members personally and let them know.  Do it without
        flaming and you might get their attention.  If you can't get
        the DCU to provide the services you think you need, and you
        can get those services elsewhere (isn't it great to live in
        a capitalist society where you have a choice?), you should
        take your business there.  If you can't find what you want
        elsewhere, it's probably because there's not a large enough
        market to make a profit.  (After all, banks are in business
        to make a profit, even the DCU -- the DCU returns its profits
        to its shareholders in the form of dividends.)
        
        Tom

    I think that the raising of the minimum balance to earn interest
    is an invitation to close my account.  You see, the only thing I
    use my DCU checking account for is my mortgage payment.  My balance
    never gets up to $1000.  My local bank will pay interest on an account
    with a much lower average balance (yeah, they charge if I write
    more than 10 checks, but I only need one "mortgage fund") and offer
    more convenience than the DCU office in the lobby of CX01.  Oh yea,
    and I can have the amount deposited into my checking account at
    my local bank with a signature on a form.
    
    BobW

    
    	The difference between the checking account interest rate and
    	the savings account interest rate is not much.  Why not keep
    	your funds in savings instead?  (Unless, of course, you know
    	that you ALWAYS have enough in checking to stay above the $1000
    	minimum...).  You can still write checks without bouncing because
    	DCU will dip into your savings if the funds are there.  It is
    	sort of like a CRT loan in reverse.  There is no minimum (actually
    	I think the min is $5), and they pay the interest on any amount
    	in savings.  Of course, if enough of us do this then I'll bet
    	the BOD will make some changes there too.  I just hope they
    	tell us this time...
    
    	I'll admit that have put in some "stop yer bitchin'" replies
    	to this conference in the past, but I also think that unanounced
    	policy changes are BAD for business.  While we still can, I'm
    	going to take advantage of some of the games DCU plays and still
    	get the interest on my meager balance...  
    
    
    	Joe Oppelt

        In reading the replies to this note, I find myself wondering why
        I'm a member of this credit union.  The biggest reason I joined
        was to have a checking account with no min balance.  The thought
        of receiving profits in better interest rates was also the idea.
        However, I don't see the need of a credit card services and the
        like.  Was there a survey sent out to indicate what we as a all
        wanted for services???

        I don't see the need again for fancy services, I believe that 
        the DCU can't compete with the bigger banks.  I'm all for going
        back to a more simiplier DCU.  Also I think it would be nice if
        the lines of communication were open to all.



                                                        Rich

    I think people that shop around for loans and to get the best deal
    aren't after lots of services, either.  It seems obvious to me that
    the services issue appeals to DCU because that's where they look
    good.  They don't look good as far as loans and such go - let alone
    the services associated with those loans.  So, seems to me they
    are trying to improve where they are good and drop off where they
    need improvement if they are to compete.  I imagine improving services
    looks better on paper.  Looks to me like they are intentionally
    shutting themselves out of the 'big account' market.
    
    Steve_who_keeps_his_draft_account_near_0

        re .9 and
        
>       ...  Also I think it would be nice if
>        the lines of communication were open to all.
         
        Can you expand on this?  What "lines of communication"
        do you feel are not "open to all"?
        

        re .11

        I meant to say, that when a change for example the min balance
        for a checking account was changed from $500 to $1000, nobody
        was notified.  In fact I didn't know there was a minimum at all.

        I hope in the future that the DCU will inform all members when
        it makes a change, any change.


                                                Rich

        I expect to see notice of this change (after the fact, but
        notice none the less) in my DCU newsletter that accompanies
        my statement.  You get the same newsletter -- do you read it?
        If not, it's not the DCU's fault.
        
        I agree it would have been nice if they had told us before
        the change, but it would not have made any difference in the
        way I manage my share draft account.
        
        Tom

>        I expect to see notice of this change (after the fact, but
>        notice none the less) in my DCU newsletter that accompanies
>        my statement.  You get the same newsletter -- do you read it?
>        If not, it's not the DCU's fault.
        
I read mine thoroughly.  Last time, the announcement came on the 2nd 
statement following the change (i.e, 4-6 months after).  It was on the 
back page, in smaller type.  I am looking forward to my 10/1 statement 
and accompanying newsletter with anticipation.

    I was told by the DCU branch here that the announcement should be
    with this month's statement.
    
    Personally, I don't care for these "after the fact" statements.
    I think it's very poor business practice!  I know of a few people
    who are about to cut their ties with DCU.  If this practice continues,
    I'll be cutting loose myself.
    
    Don

    re .4
    	When has the B.O.D. EVER!!! solicited my opinion on ANY!!! issue?
     How dare they presume that I would prefer one thing over another
    without first asking.  As it happens, I prefer the higher rates
    on savings and lower rates on loans to having a credit card which
    would simply give the credit union more income.  I don't know about
    most of the other members, but they are not representing my preference.
    
    This brings up a major problem that I have had with the B.O.D. 
    We almost never hear of them until they have been nominated for
    reelection.  It may be time for us to place a new body of people
    in there who more closely represents the true wishes of the members.
    
    I also cannot condone the complete lack of notice.  If we had been
    notified 2 or 3 months ahead of time, we could have voiced our dislike
    of this policy.  This may not have caused it to be changed, but
    they would have at least known how we felt.
    
    I apoligize for my temper tantrum.  It just bothers me when someone
    presumes to know what I want without asking first.
    
    Ed..
    

    
    Just remember how secretive the BOD was after elections.  It took
    one LOOOG time to find out who won.  I was activility trying to
    find out.  I was rooting for Homer.  I hope he tries again.
    Lets get a couple on none banking types on the BOD next time.
    ed
    

    I am having some troubles figuring out why I should continue to
    be a member.   As Tom mentions in .6 banks pay interest, charge
    interest and also pay profit (mostly) to their stockholders.  In
    a credit union the portion of the business that is profit is returned
    to the "members" as lower interest charged, higher interest paid
    or more expensive services.   It looks as if wee fall short in all
    three cases.  Can somebody explain where the money is going as it
    does not appear to be flowing freely back to the members ?

    
    I continue to be a member in DCU because:
    
    . I've never had enough money in my checking to worry about interest.
    . I've always used the checking account to write checks to pay bills.
    Anything else I withdraw money from my DCU account and deposit
    elsewhere. I also haven't found anything locally (Chicago suburbs)
    that would satisfy me. Till then DCU is good enough. I haven't taken
    any loans from them, except a credit line which I used two or three
    years ago.
    

       Got my statement yesterday. It said NOTHING about the change.
    There wasn't even a newsletter in it. 
       Does the BOD ever have a look at this file? Maybe someone could
    compile it and send it to them. 
       I propose that NO incumbants receive votes next election!
       I'm considering taking a hike.
                                              Denny

	begin{flame}

        I got my statement a couple days ago, and it did have a flyer
        stuffed in it. If I hadn't explicitly been looking for this
        tidbit, I'd have never noticed it! The statement DID NOT SAY that
        they no longer pay interest on balances under $1000! It did say
        that they still pay interest on balances over $1000. If someone
        who hadn't been following this conference would read that, they
        might not even realize that a change had occured. I find the DCU
        wording on this matter to be somewhat misleading at best, or close
        to fraudulent at worst.
        
        Re: .20
        
        Given what has been going on lately, I'd support any coup attempt
        to replace the BOD at the next election. As a 'field' member,
        almost 1000 miles from my nearest DCU office, I'd like to see
        representation on the board by districts, with the field employees
        having a voice equal to their membership. If one member of
        the BOD was specifically accountable to ME, I wouldn't hesitate
        to tell that person EXACTLY what I thought about the DCU
        operation. As it is now, noone seems to be interested.

        end{flame}
        
        NOTES is a lot less expensive than a shrink.

    This is an official response by John Tilley of the DCU. The portion of
    that response, dated 5-OCT-1987, that applies to this note topic is
    included below. See note 2.22 for more information. 
    
    Whether you agree or disagree with the response from the DCU,
    
            *PLEASE* DON'T SHOOT THE MESSENGER (me)
    
    (my flame retardent terminal is out being cleaned)! 
    
    Carl Leeber
******************************************************************************

$1000 MINIMUM CHECKING BALANCE TO EARN DIVIDENDS: Recently DCU raised the 
minimum balance required to earn dividends on checking from $500 to $1000. 
This was done to recover a portion of the income lost through the Federal 
Reserve Bank which required DCU to keep $20 million in their account to cover 
member's checks. While our funds sit in this account we earn no dividend. The 
annualized loss is approximately $300,000, by not paying dividends on member's 
checking accounts under $1000 DCU recoups approximately $270,000.

It was a management decision to drop the dividends rather than begin charging 
a monthly fee for having a checking account to recover this loss.
    
******************************************************************************

    thanks for the message (.22) .  while I now may understand the reason,
    I don't understand the reason why we we not TOLD of the change!
    
    ed
    

On the face of it - the response sounds reasonable - "it costs us more
to offer the account - so we're passing the cost on to you" 

Allocate costs specifically to the services they support - sensible.

I have to wonder if they been doing this all along.  I.E...is
checking account profit (the spread between the interest they pay and
the interest they earn, minus expenses) zero?  Or does it go to help
pay for some other less profitable services (like mortgages, etc), and
they are doing this to maintain the status quo, rather than shedding 
the less profitable services?  Put another way - if they really let
checking account service pay its own way, would this change be
necessary? 

This come back to the services vs. $$$ discussion in another note -
which I hope DCU BOD members are reading. 

Finally - what do people think - would they prefer DCU to 

	1) RAISE the minimum balance or

	2) MAINTAIN or LOWER the minimum balance, and adjust the
		interest rate downward accordingly.


PS: - Anyone know if the deposit they give the federal reserve is 
standard practice - or was required of DCU (in that amount) because of 
some other reason....

    Assuming that the deposit with the Fed is standard, then I find
    it hard to believe that they have not had that $20 million already
    on deposit.  If there has been a deposit, but this money is above
    that then the question is why the increase.  If the increase is
    because of poor management practices, or shakey loan portfolios,
    then I do NOT want to pay for that.  If, however, the Fed required
    ALL other banks and credit unions to also raise their minimum reserves,
    then I understand and agree with the policy.
    
    NOTE: THIS DOES NOT RELINQUISH THE CREDIT UNION FROM THEIR OBLIGATION
    TO NOTIFY US BEFORE THEY DO SOMETHING OF THIS NATURE.  JUST BECAUSE
    THEY WERE REQUIRED TO DO IT, DOES NOT GIVE THEM THE RIGHT TO BE
    SNEAKY ABOUT IT.
    
    (Sorry about the flame).
    
    Ed..
    

        Actually, the Federal Reserve does, from time to time, change the
        amount (reserve?) that banks must keep on deposit with the Fed.
        This is done for a variety of reasons, one of which is to "adjust"
        the amount of money available in the loan market, which can in
        turn impact interest rates.  Typically, the amount on "reserve" is
        a percentage of the total available to the bank, so the total
        amount the DCU has on deposit at the Fed has probably grown over
        time as the amount on deposit in the DCU has grown.  
        
        I don't recall whether recent fiscal policy has been to "tighten
        the money supply", but if so, then the percentage of share draft
        assets the DCU must have on deposit with the Fed may well have
        increased. 
        
        I don't recall just which index the share draft interest is tied
        to, but it is something like money market rates, which are not
        under the DCU's control. 
        
        Tom

I just spoke with Prudence Schmitt, a very knowledgable, pleasant,
honest, frank person in DCU's communications department.  (John Tilley
is on vacation until next wednesday).  According to her, the $20
million requirement has been around for a while, and they have covered
the 'lost' interest with loan income (especially from real estate
loans).  However, the market for loans has dried up, and they are not
getting the loan income they used to.  So, since they can't cover the
'loss' by raising loan rates any higher, they decided to cover the
lost income by raisning the minimum balance on checking.  She doesn't
know whether the alternative of lowering interest rates paid on
savings was 
considered.

She asked me to post that she's not 100% sure of this, and asked that 
I check here data next week.  Since BOD reads this - please post a 
reply if this is error. 
/j

    It seems that maybe the law of supply and demand really works....
    If the loan activity has gone south...maybe because the rates were
    too high then obviously raising the rates some more would drive
    more business away...
    
    However I still have to wonder why other credit unions are able
    to offer services, low loan rates, and competitive interest rates
    on balances when they are subject to the same reserve requirements
    as DCU...hmmmmmm....
    
    
    Just wondering...
    -bob-

TO be fair to DCU, my impression is that DCU has much higher expenses 
than many other credit unions merely due to the fact that thay have to 
support SO MANY branch offices.  Some of the 'better' credit unions I 
am aware of work out of 1 or 2 offices, no?

  I'm a new employee at DEC, and I've been reading this conference to
  try to decide if I want to deal with the DCU at all.  It certainly
  doesn't look good.
  
  I've heard no one comment on the merits of fee-free vs. interest-free.
  I, personally, would rather pay a $1-$3 fee each month on balances
  below $nnn than have no interest at all payed on my balance.  I can
  see having a cutoff for interest, but $1000 is absurdly high.  I'm
  used to seeing cutoffs around $100 for interest, $250 for fee.  Most
  months, the interest I receive is more than the fee I pay.
  

>  I, personally, would rather pay a $1-$3 fee each month on balances
>  below $nnn than have no interest at all payed on my balance.  

You mean you'd be willing to pay $3 in fees to collect $1 in interest?  
I don't think I'd go for that, because that means part of the $3 is a 
fee to pay for crediting me $1.  It would be cheaper just to skip the 
whole thing entirely.

And although I don't know your tax situation, nor am I sure what this 
year's tax laws say on the subject, it would seem that you are liable 
for up to 33� in taxes on that dollar, while you can't deduct the $3
fee. (Or does the $3 slide in under the classification of fees paid to
manage your investments? Any unconvicted tax experts out there?) 

					>>>==>PStJTT

Re:    < Note 52.31 by PSTJTT::TABER "Write big & carry a soft message" >
   
>And although I don't know your tax situation, nor am I sure what this 
>year's tax laws say on the subject, it would seem that you are liable 
>for up to 33� in taxes on that dollar, while you can't deduct the $3

   Excellent point. Including state taxes, it can be worse than 33�.
    
>fee. (Or does the $3 slide in under the classification of fees paid to
>manage your investments? Any unconvicted tax experts out there?) 

    The Tax Court has ruled that checking account fees are not deductible
    (see JK Lasser for details).

    Okay, okay, forget about the fees.  I didn't say I liked them. 
    There's just something psychologically obnoxious about not getting
    interest on under $1000.  I can see there being a minimum, but even
    $500 seems high to me.
    
    BTW, is that minimum average for the month, or "drop below once
    and kiss your interest goodbye"?
    

your interest is accrued every day, based on the balance at the end of 
the day.  My favorite would be interest on all balances, but a
lower rate for under $1000 would be fine.  Like when they started:
6% if under $2K, then money market rates if balance was over $2k.

re:    < Note 52.33 by RSTS32::KASPER "Beverly T Kasper" >
    
   > BTW, is that minimum average for the month, or "drop below once
   > and kiss your interest goodbye"?
    
    As I understand it, all of DCU's accounts pay interest on a
    "day-of-deposit-to-day-of-withdrawal" basis. Therefore, checking
    accounts earn interest only on the days their closing balances exceed
    $999.99

    Carl Leeber
    {maintainer_of_batch_mailing_of_new_entries_to_DCU_BOD_Chair}

    I can't understand some of the fussing going on here.
    
    Agreed, when the DCU changed the minimum balance from $500 to $1000
    dollars they should have done so only after clearly informing us
    either in advance or at least at the same time it took effect.
    
    The moaning about charges, fees, interest, however mystifies me. I
    think that I am a typical DCU member.  The money that goes into my DCU
    NOW account is for monthly bills and day to day living expenses. As a
    result, I doubt that my average daily balance is much more than
    $200-$300 dollars; I don't expect to make any money on it.  It is not
    there for investment.  The money that I invest, goes elsewhere and that
    is managed quite differently, i.e. that is the money that I worry about
    if I worry at all.
    
    Rather than wasting a lot of time and energy shouting about what
    the DCU should do, it makes more sense to look closely at what it
    DOES do and use that to your advantage.  I have a DCU checking account
    because it is convenient and because it does not cost me anything except
    when I order new checks and because I can walk to the office and
    withdraw money from it directly.  I think of it as having someone
    else hold my cash for me in a secure place during the month until
    I need it.
    
    This is not to say that the DCU does not need to be responsive or that
    there may be other things which it should change, but if you are
    finding that their way of doing things is either not to your liking or
    not to your advantage, then why do you continue doing it that way?  Let
    them know exactly how you feel and put your money somewhere else until
    they do it the way that you would like.  It is your money after all and
    if you are not managing it for your greatest benefit, how can you
    expect someone else to?
    
    I doubt the DCU is perfect, but I am %100 satisfied with what it
    does for me.  Then again, that may be because I don't expect %100
    of things to go my way so I'm not usually disappointed.
    
    Steve
     

    VERY well said, Steve.  And my sentiments exactly!
    
    \bruce

    
    RE: .37, .38
    
    The point you fail to see is that *some* people must keep larger
    sums of money in their checking accounts for day to day/week to
    week expenses.  Because *your* needs don't match others needs doesn't
    make the others' needs any less valid or logical.
    
    The underlying point of this discussion is the underhanded way DCU
    went about changing one of the ground rules.  If they did it for
    minimum balances, they could do it for other things.  DCU members
    deserve better treatment.
    
    Phil

    Re: .39
    
    And the point that YOU failed to see, I very clearly stated.  I
    did not state or imply that since the DCU matches my needs that
    everyone else should be happy too.  Actually I very clearly stated
    that if the DCU doesn't match your needs then WHY do you continue
    to use it?  If I felt that I was not getting the service, quality,
    or whatever else I needed from the DCU, then I would not hesitate
    to tell them so, BUT I would also put my money where, in my mind,
    it would be better treated until the DCU started doing business
    in a way that meets my needs.  If you are losing money this way,
    then it is YOUR loss and if you leave things that way while you
    complain bitterly then YOUR loss just keeps mounting.  Complain
    all you like, but move your money.
    
    And as for the underlying point of the discussion, if I felt that
    the DCU was being "underhanded", then I would definitely move my
    business elsewhere permanently.  One of MY needs is not to feel
    that whom I do business with is underhanded.
    
    Steve
    

    RE: .40
    
    And what YOU fail to realize is that until that move by DCU I was
    pretty much satisfied with everything else.  I've considered changing
    banks but I'm still evaluating the trade-offs to such a move.

    And what YOU also fail to realize is that once you pull out of an
    organization that you then forfeit your ability to influence that
    organization.  I'd rather try to influence DCU policy than to just
    run to another bank.  If you want run to another bank, fine.  But
    don't jump on people that are trying to mold DCU into a business
    that better serves its members.

    Phil