Conference 7.286::dcu

    I was disappointed with CU's cost comparisons.  Even though they'd gone
    to the trouble of defining three types of checking account usage, they
    assumed that all other services were done only once each per month.
    
    I, for one, do a LOT of ATM transactions at BayBank but I haven't been
    to a teller in years.  Conversely, I've NEVER used a DCU ATM and ALWAYS
    deal with DCU tellers.  These patterns reflect the convenience/economy
    of the BayBank ATM network -- especially as compared to DCU's.
    
    If one were to factor in the $1/transaction charged by DCU for use of
    CIRRUS ATMs (including the BayBank X-Press 24 network), a much higher
    monthly cost would result for DCU.

    Compared to other institutions in the survey which charge for non-owned
    ATM transactions, the DCU is above the average of ~0.85. Sigh. 

    Also, the article said that the cost for Cirrus (to DCU) is $.60.
     Where does the other $.40 go?
    

    This is an official response by Mary Madden of the DCU. That response,
    dated 18-JUL-1988, is included below. See note 2.22 for more
    information. 
    
    Whether you agree or disagree with the response from the DCU, please
    either direct your comments to the DCU directly (dtn-223-6735) or
    post your comments as a REPLY to this entry in this conference.
    
    Carl Leeber
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    While it's true that the Plus and Cirrus ATM networks charge DCU .60
    per ATM transaction, Consumer Reports failed to report other charges
    associated with each network. 
    
    For instance, DCU incurs a switch fee of .15--.25 per transaction,
    depending on the ATM's location. Monthly, we're billed $100 for network
    membership fees. And, we pay an annual fee for marketing. 
    
    Furthermore, to provide the network service, we have in-house cost as
    well. DCU must lease equipment and pay circuit costs to transfer
    account information. In addition, we pay employees to balance out the
    20,000 monthly network transactions, and try to collect on overdraft
    accounts. 
    
    The ATM network system actually nets out to cost DCU more than $1.00
    per transaction.

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    Re .4:
    
    Ms. Madden's reply nearly changed the subject.  As I noted in .1,
    Consumer Reports' handling of ATM costs were way off the mark. 
    Ms. Madden would seem to confirm that.
    
    The other issue has to do with WHY DCU prices its ATM activities
    as it does.  Ms. Madden attempts to justify the $1/transaction fee
    through its direct costs.  What she ignores is the potential for
    savings in teller positions and even whole branches which can be
    realized when the ATM system works as it should.
    
    Look at BayBank, for example.  There are actually fewer branches
    now than there were in 1981 when I moved here, but the number of
    ATMs has increased ten-fold.  I suspect, but have no statistics,
    that the number of teller positions in the remaining branches has
    been subtantially reduced also.
    
    BayBanks' clientele is drawn from a cross-section of the community,
    which means that some percentage will insist on using a live teller no
    matter what.  DCU's clientele is drawn almost exclusively from the
    "high-tech" crowd; we're used to operating on strange schedules and
    we're eager to use technology to make our lives more convenient.
    
    Our (DCU's) ATM system could/should be the model to which stuffy New
    England banks look with awe -- not the converse, as it is now. 
                                                                 

Yes, I would also think that every DCU ATM is a cost-savings for DCU, 
but every discussion I have had with DCU personnel suggests the 
contrary - that they're expensive to buy, install, and maintain.  An 
extra "service" above credit union basics.  I don't know how true this 
is.  I would think if they put one ATM in each branch, they could 
eliminate one full-time person, which (ought to) be a cost savings.
However, what I hear is a very different story.

Here at HLO, the tellers tell me that they don't see too much of a 
decrease in the window traffic since they put in the ATM.  Still an 
awful lot of people who come in to get their lunch money every day.
I think its partially because the branch is in the middle of the
manufacturing building, and the ATM is in the lobby of the smaller 
engineering building, a bit less convenient to all (but a good place 
for an ATM nevertheless). 

Maybe what DCU should do is, at sites where there is an ATM, push more
withdrawal-only transactions to the ATM by giving window-preference to
other transactions.  Maybe, eventually, the decrease in window-traffic
will permit them to cut their window staff, and actually see a cost
savings from the ATM... 

(How about no withdrawal-only transactions at the window for less 
than, say $200?)

    I have a friend who works for BayBanks and is responsible for several
    ATM locations. She is on beeper most weekends, usually has to go
    refill/fix several machines each night/weekend, and gets paid overtime
    for this.
    
    The cost savings of fewer tellers may be ofset by the increased
    maintenance of the machines. As we all know, teller jobs are usually
    low paying positions and the hours are minimal. My friend is an
    "executive" at the bank (college degree and all) so probably paid
    higher. Because of the amounts in these machines, and the risk of
    abuse/embezzlement, they usually want a fairly high level person
    working the machine in off hours.
                                                     
    							Mark