Conference 7.286::dcu

    Re .0:
    
>   What does "relationship banking" mean to you?
    
    To my mind, "relationship banking" reflects the difference between
    being seen as (just) a customer and being seen as a "partner" in a
    banking relationship.  The keystone of such a distinction is
    FLEXIBILITY; no two relationships are identical because no two
    customers/partners have identical needs.
    
>   Do you feel this is or is not a valid approach to running DCU?
    
    Short of "giving away the store", the type of personalized service that
    this would afford is ESSENTIAL in the operation of DCU.  This is
    especially true when our competitors (commercial banks) are capable of
    economies of scale that more than offset the not-for-profit tax
    handling of a credit union.
    
>   (If possible please state your current 'relationship' with DCU or other
>    CUs or banks, ie. what accounts to you have where, who do you
>    consider your primary institution (and why))
    
    My family and I have been dependent upon ATMs since the late 1970s. 
    When we moved to Mass. in 1981, ATMs were still new here, but BayBank
    was miles ahead of the other banks (and offered free checking with
    direct deposit), so we gave them the bulk of our business.  Times have
    changed at BayBank, so now I need to keep $2000 in savings to avert
    monthly fees on my checking account.  Compared to the alternatives
    (including paying $1/tx to access my DCU account from ATMs near my
    home), the "opportunity cost" of that $2000 is still a bargain.
    I carry an American Express "Gold" card, for which the line of credit
    is my BayBank overdraft protection (one line of credit for both).
    
    DCU offers me a different kind of convenience.  I can automatically
    deposit part of each paycheck into RSVP and part into checking, from
    which I pay my church pledge, mortgage, insurance, taxes, utilities,
    and other "budgeted" expenses.  The RSVP account provides the cushion
    for cash flow crises (telephone transfer works just fine, thank you).
    
    DCU *can't* get the rest of my family's business without offering us
    ATM access at a par with BayBank (free transactions, deposits included,
    at X-Press 24 machines).  I live with my wife and younger (16) son in
    Newton, MA.  My wife works in Brookline and my elder (19) son lives in
    Back Bay and is a student in Cambridge.  There are NO DCU ATMs within
    easy reach of ANY of those places.
    
    DCU only has to be "in the ballpark" on interest rates to be my "lender
    of choice" for auto or personal loans, but the terms and conditions
    need to be more flexible than a commercial bank.  (In the case of a
    Master Card or Visa account, DCU would have to work real hard to take
    my business from USAA.)
    
    I realize that I've said almost nothing new here, but you asked. 8^)
                                   

>    What does "relationship banking" mean to you?

    One of the things that my father suggested to me when I was still a
    kid was that I find businesses that fit what I needed and stick with 
    them. That I establish a relationship. That I do business with the 
    same people all the time, that I make friends with them. The result of
    my giving loyalty to a business would generally be reciprocated. This
    would result in mutually advantageous dealings. That's pretty much what
    relationship banking means to me. We get to know each other and
    exchange for my regular business I expect the DCU to treat me in a way
    that I will be less tempted to find an alternate to doing business with
    them.

>    Do you feel this is or is not a valid approach to running DCU?

    I believe it to be a central part of the credit union philosophy as I
    understand it.
    
>    (If possible please state your current 'relationship' with DCU or other
>     CUs or banks, ie. what accounts to you have where, who do you
>     consider your primary institution (and why))

    I joined the credit union when I re-joined Digital 11 years ago. At the
    time I had accounts at a local bank - where I had (have) my mortgage.
    Working in a plant where there is a DCU branch, DCU banking was more
    convenient. And I was very dissatisfied with my bank. Their service
    was very poor and, well, that's enough to say in public.

    All my accounts are with the DCU. I have borrowed only from the DCU for
    the last 11 years. Car loans, home improvement loans, a computer loan,
    and a home equity loan. The only relationship I have with an other bank
    is my mortgage and that could change.

    As a person with a local branch where I work, convenience is very high.
    Service at each of the three branches in NH at sites where I've worked
    has been excellent. Getting loans has generally been a pleasant
    experience. Paying them off through either direct deposit or touch tone
    system is easy. I *love* what I can do with a touch tone (just wish I
    could transfer between my and my wife's account).

    			Alfred

    Though borrowing money has not been bad, I do sort of feel that DCU is
    not doing all that I'd like in this area. It's not enough to drive me
    away (though it was close once) but if I was shopping for a loan today
    I'm more likely to check other places then I once was.

    
    
      To me,  Relationship banking means treating the customer
    so well at their "point of entry"  that they want to come
    back,  and want to do the bank a favor by bringing all their
    banking to the institution.
    
      To cite an example,  when checking fees looked imminent at DCU,
    	I started checking out other options,  including my long forgotton
    	savings account at the Navy credit union.
    
      I called NFCU - not only did they offer free checking,  but they
    	paid interest on any size balance,  and THE CHECKS ARE FREE ALSO!
    
      I closed a bunch of small accounts,  and moved everything to NFCU,
    	although it was not a large amount of money by bank standards...
    
      Then I discovered they also had a FREE  Visa card  which carried
    	a 13.5% interest rate.    I signed up,  and transferred a modest
    	balance to the card.  (the rate is now 12.5%)  I attempt to charge
    	as many routine expenses as possible on the card,  and am happy
    	to be able to direct a few percent of the action to the bank
    	that has treated me so well...
    
      Then I found a car I _really_  liked.  The cost was more than book
    	value,  but the car was exceptional.   I didn't even bother to
    	rate shop - I called NFCU,  applied for the loan,  asked them
    	to make a note on the loan application to the effect that this
    	particular (5 year old)  car had only 13,000 miles on it, and
    	was covered by an extended warranty  hence the higher than book
    	value price.  3 days later I had the check.
    
      Since then,  loan rates have dropped,  and the "bargain"  11% that
    	I'm paying NFCU is no longer really a bargain,  but I won't bother
    	to refinance - they have been wonderful to me each time I've 
    	done business with them - I feel somewhat glad to be able to
    	return the favor...
    
      The car loan is just about paid off,  the credit card is active but
    	carries a 0 balance,  and knock on wood,  I won't need to borrow
    	any money for quite some time,  but when I do,  NFCU will get the
    	first (and probably the only)  phone call...
    
      That's relationship banking...
    				
    						-al
    	

    >What does "relationship banking" mean to you?

    In simplest terms, relationship banking means that the member is not
    just a series of bits on a spinning disk.

    >(If possible please state your current 'relationship' with DCU or other
    > CUs or banks, ie. what accounts to you have where, who do you
    > consider your primary institution (and why))

    My relationship has been more with two individuals rather than an
    institution.  To understand this relationship, you have to understand a
    little about Texas banking laws.  Until the mid 1980's, branch banking
    was prohibited in Texas, thus making location a major, if not the
    deciding factor in most peoples choice of a financial institution.  In
    1983 started working for a company that also owned a S&L and had a
    branch in the building where I worked.  Needless to say, I moved my
    accounts to that S&L.  I got to know the head teller and Asst. Manager
    of the branch.  A year or so later, Texas law was changed to allow
    branch banking in most parts of the state.  When I joined DEC in 1987,
    I still had my accounts at the S&L.  The Asst. Manager had moved on to
    become a branch manager for another institution and the head teller was
    now the Asst. Manager.  One day I got a call from the Asst. Manager and
    was told that the S&L was going to be declared insolvent the next week
    and suggested I withdraw my money so that it didn't get tied up.  That
    was definitely an example of relationship banking.  The only question
    was what to do with my money.  I called the former Asst. Branch Manager
    who was now a Branch Manager at another institution and made an
    appointment to move my accounts to his institution.  The checking
    account required a minimum $500 balance to avoid a monthly fee, but he
    checked the little box that indicated a relationship account and that
    account never has any fee regardless of the balance.  We also opened a
    money market investment account that had a higher than usual minimum,
    but also paid higher than usual rates.  This account has a $10/month
    fee if your balance drops below the minimum.  He told me that if it
    ever dropped below the minimum, to let him know and he would make sure
    the fee got waived.  I took advantage of that last year when I
    temporarily hit my account to pay the closing costs on my new house.

    After the other S&L closed down, the Asst. Manager was hired by the
    Branch Manager of my new institution and all of a sudden, I had the
    same two people I had been dealing with for all those years, right next
    door to me.

    A while back, I needed to deposit/cash an expense check but got tied
    up in a meeting.  It was past closing time when I got to the S&L, but
    the Asst. Manager opened the door and let me in, took my deposit, and
    opened the safe to get the cash I needed.

    Service like the above means that it will take a nuclear explosion to
    get me to take my money elsewhere.

    >Do you feel this is or is not a valid approach to running DCU?

    It's the only way if DCU is going to survive a dwindling field of
    membership with mostly uncompetitive products.  The one thing I read
    over and over in this conference is that the main reason people use DCU
    is convenience.  Once a person gets terminated and no longer has a DCU
    branch within walking distance of their desk, DCU will have a hard time
    keeping their accounts.

    My relationship with DCU is limited to my $5 savings account and a soon
    to be canceled gold VISA card.

    My wife and I have gold MC cards and an auto loan with another CU. 
    I've told the story of the auto loan in another note, but it is
    interesting to note that this other CU got our original auto loan
    because we were having such a hard time getting one thru DCU.  The gold
    MC cards have no annual fee, a 28 day grace period, and 12.??% interest
    rate.

    I consider my primary financial institution to be the one where the
    above Asst. Manager and Branch Manager are located.  My checking and
    savings are all there.  I'd say that why is pretty obvious.

    I will say this, I refuse to have a loan at any institution that has
    the right of offset in their loan contract and that I also have funds
    on deposit there.

    Bob

re .4:

Ahem... I *really* don't like the idea that "relationship banking" means
giving special deals to people based on their being friends of some
employees!  That is precisely what I was wondering about when the term
"relationship banking" emerged from old Board meeting minutes a year ago.

I do agree that the DCU ought to seek to beocme a place where members with 
long term relationships can expect positive responses to non-standard
requests.  The difference is that there needs to be some reasonably
equitable standard for when is it appropriate to make exceptions to
general policy.  Also, exceptions should be made based on a member's 
relationship to the DCU, not on the member's relationship to DCU employees
or DCU board members.  I don't approve of the "buddy system" of using
a company belonging to someone else to do favors for one's friends.
Of course, a person who owns their own business can do as they please.

Further, I am uncomfortable with the idea of people getting special
interest rates or special fee deals based on "relationship banking".
For interest rates and fees, I think there should be policies that
apply equally to everyone.  There's too much potential for abuse when 
special rate and fee deals can be made based on relationships.  For
example, if someone has a good enough reason why they personnaly should 
have their credit card fee removed, I think that's a good enough reason 
for everyone in the same circumstances to have their fee removed, too.

The kinds of "relationship" deals that I think are appropriate are cases
involving services or risk evaluation.  E.g., surely the loan process could 
be made simpler for members with a strong relationship with the DCU -- I
find the standard forms to be a real pain to fill out.  Or say a member
with a long history of loans and deposits doesn't quite qualify for a
loan.  I'd say, take another look -- this person is probably a much better
risk than the standard methods suggest, based on the relationship.  Or
maybe someone needs a check guarantee.  If there is a strong relationship,
perhaps the DCU should do it even though they normally don't.  Or maybe
someone has a bankrupcy but otherwise is a good credit risk and has a been
a good DCU member -- this is another case where an exception seems warranted.


So to summarize: I feel that a strong relationship to the DCU makes a
member a better risk for loans and makes a member more deserving of
unusual special services, and the DCU should have the flexibility to act 
on that basis.  But I think deals based on relationships to individuals 
should be scrupulously avoided, as well as any reduced rate or fee deals.
In those cases, I think apparent or real abuses are too hard to avoid.


	Enjoy,
	Larry

I have relationships with the following financial institutions.  The
summary is that I only add a new financial institution when someone I've 
already dealt with is clearly not sufficient.  "Sufficient" means the 
rates/terms are competitive (not best) and they are easy to deal with.


Amica Insurance:  They are really nice to me -- they even let me raise
my house insurance over the phone 24 hours before hurricane Gloria hit!  
I get offers for cheaper insurance every year, but I won't switch.  One
day I realized that every time I called Metropolitan with a problem, I
hung up the phone annoyed.  So now I pay 5% more to have Amica insure my
cars, too.  When I got unhappy with the DCU, I moved my IRA's to Amica,
which had a better rate at the time, too.


People's Bank:  They have lots of ATMs in central Mass, they are always
nice to deal with, and they are agressively fiscally conservative.  They
wouldn't give me a home equity loan, but nobody else would either.
When I got unhappy with the DCU, I moved most of my kids' college
funds to CD's at People's Bank, since I already had a happy relationship
with them.  And oh yes, I don't pay fees for the checking account.
My wife uses this account -- she doesn't have access to a free DCU ATM.


DCU:  I direct deposit into four separate accounts, plus doing automatic
payment of my car loan.  The DCU was reasonably competitive when I bought
my car (and was better than People's), so I didn't bother looking anywhere
else.  I got a house loan here once, but I refinanced elsewhere because
DCU rates weren't good enough and I had many problems with service from the 
people they sold my old loan to.  I do all of my own cash transfers and
deposits through the DCU -- there's a branch in my building.


Fidelity Investments:  Neither People's nor DCU would buy stock for me,
so I had to find someone else.  I wanted someone who would also be able to
manage bond and stock funds for me when I get around to setting them up.
I used to have a money market through them (before I bought my first house)
and was happy with their service.  So now that I have some cash assets 
again, and since they seemed to offer a good deal, I didn't look around.


AT&T:  I needed a new credit card because my old one started charging a
fee.  I always got bogged down in the form whenever I tried to get a DCU
card, and until recently it would have charged me a fee, too.  So when
AT&T offered me a fee-free card, I took it.  They have great service --
when I overran my credit limit on vacation, I made a toll free call to
ask for a higher limit, and was immediately able to complete the charge.
So long as it stays fee-free, I'm keeping this card.


	Enjoy,
	Larry

    re: .5
    
    Waiving of fees, etc is quite common in the banking industry.  None of
    the things they have done for me are illegal or violate their
    institutions policies.  It's just that you and I generally don't have
    the volume of business with an institution to get such treatment.
    
    For example, waiving the minimum balance fee on the checking account is
    standard practice for customers whom the institution wishes to
    establish and/or maintain a long relationship.  In my case, the branch
    manager knew that I wouldn't close out the account in 6 months because
    some other institution had a better deal.  In the case of the money
    market account, that just makes good business sense.  If I had an
    account at an institution that wouldn't waive the fee, I would have
    simply closed the account before the balance dropped below the minimum,
    moved the balance to my checking account, and re-opened the money
    market account the next month when my cash was above the minimum.  The
    cost to the institution to close the account and re-open an identical
    account a month later would have more than offset the income it would
    lose by waiving the fee.  In most cases, I suspect that if I had
    explained the matter the branch manager of any institution, they would
    have realized this and waived the fee.  In this case all I had to do
    was tell the branch manager that my account would dip below the minimum
    for a month and he took care of it.  No questions asked.  Had I allowed
    it to remain that way for an extended period of time, I'm sure he would
    have had a quiet discussion with me to determine whether we should
    simply close out the account.
    
    I would hope that DCU, or any institution for that matter, would
    examine individual cases and act appropriately.  Unfortunately, some
    institutions blindly follow policies and then wonder why people don't
    like dealing with them.
    
    Bob                          

    RE:.3

    >  I called NFCU - not only did they offer free checking,  but they
    >	paid interest on any size balance,  and THE CHECKS ARE FREE ALSO!

    	I'm not familiar with NFCU could you tell me who they are and
    where they are.  They sound like a CU I'd like to do business with.

    Joe

    
    
      "NFCU"  is "Navy Federal Credit Union".  
    
      In order to qualify,  you either have to be in the Navy (Active or
    retired),  or  the dependant of someone who is currently active.  
    (Which is how  I qualified.)
    
    
    						-al

    What is the official definition of "relationship banking".  I haven't
    heard the term before this.

    I don't have a text book definition for it but I know what it means as
    it applies to DCU members.

	1)  $3500 in savings at DCU (household total)
	2)  $6,000 outstanding in DCU loans (household total)
	3)  Members that obtained a DCU mortgage loan that was sold
    
    If a DCU member meets these criteria, they are classified as having a
    'relationship' with DCU.  If they do not meet the criteria, they do not
    have a 'relationship' with DCU.  This 'relationship' is being used
    and/or was used to determine who pays for certain services and products
    that DCU offers.  This 'relationship' is why some DCU members currently
    pay an annual fee for a credit card while some do not pay a fee. 
    Another 'relationship' was used last August to determine which DCU
    members would pay for checking and which ones would not.
    
    Is this a valid approach for DCU to take?  Any problems with this?
    

I believe the concept is valid.  I suspect there is major disagreement over
the criteria for determining whether one has a relationship with DCU.

Bob

    
    
      The concept is probably valid,  but my concern is that 
    the required "relationship"  that they desire should probably
    be better termed "Marriage"...
    
      I'd be willing to bet that a large portion of DCU members 
    simply _DO NOT HAVE_  $3500 in savings anywhere.  (Especially
    in times when rates are low,  and there is an overall trend
    toward paying down consumer debt with excess cash.)
    
      Further,  people with low savings are probably over their head
    if they are carrying $>6k of  debt continuously.
    
      I guess my concern is that there still isn't really any
    data to support the fact that $3500  (or whatever)  is really
    required  for a member to be 'profitable' - it seems arbitrary...
    
    
      Rather than start yet another "tax the poor"  program,  how
    about putting a column in Network    along the lines of
    
    	"did you know that members who have less than $6k in loans
    		active,  or less than $3500 on deposit"  actually
    		are costing DCU money?    If you have funds on 
    		deposit at,  or loans with other institutions,  
    		please consider consolidating them at DCU so that
    		your money not only works for you,  but works for
    		the good of your credit union as well"...
    
      My guess is a lot of people open $10 savings accounts for their
    	kids,  or  go to the branch office on the way to lunch every day,
    	or call easytouch daily  without really thinking about their
    	effects on DCU's overall profitablity...   
    
      If the BOD actively communicated a few profiles of "most helpful
    members"  people might  consider adopting one that was most 
    compatible with their own personal situation...
    
    
    						-al
    

RE: 620.13

>    I'd be willing to bet that a large portion of DCU members 
>    simply _DO NOT HAVE_  $3500 in savings anywhere.  (Especially
>    in times when rates are low,  and there is an overall trend
>    toward paying down consumer debt with excess cash.)
    
>    Further,  people with low savings are probably over their head
>    if they are carrying $>6k of  debt continuously.
 
    This is not true.  According to DCU management, approximately
    90% of all deposits are above $3500 and 85% of all loans are 
    above $6000.  Thus, most members are "relationship" customers.  
    
    Tanya

re .7: 

Just to be sure it's clear... I did not mean to imply that anything in .4
is illegal, immoral, or fattening.  However, I don't wish to see the DCU 
doing things quite the same way that bank did things.  To quote from .7:


>    For example, waiving the minimum balance fee on the checking account is
>    standard practice for customers whom the institution wishes to
>    establish and/or maintain a long relationship.  	

I agree that it is fine to waive fees for everyone who has established
certain well-defined relationships (e.g. balance history, loan history).
I also think the DCU should be be flexible about service and the like for
members who have established some kind of good long term relationship.

However, the above sounds like it would involve a DCU person deciding who
they want to tempt into being relationship members and who they don't.
How could it avoid being discriminatory?  I'd like to see any relationship
banking deal based on the sort of relationship a member actually
establishes, not on the sort of person that member is judged to be.


>    I would hope that DCU, or any institution for that matter, would
>    examine individual cases and act appropriately.  Unfortunately, some
>    institutions blindly follow policies and then wonder why people don't
>    like dealing with them.

I agree whole-heartedly.  I just want the cases to be evaluated on their
merit regarding the financial relationship a member has established with
the DCU, and not on a basis of personal relationships with employees or
by some employee deciding who are the desirable types.  

To show why I feel this way, remember the flap last year about Mangone's
mortgage loan?  It looked like he might have gotten a significantly
below-market loan.  Of course, he didn't really.  But some of us were
worried about whether the DCU was doing "relationship" deals under which
a person, because of their being a VIP, might get a deal of a type that
was not available to an ordinary member.  There are so many possibilities
for abuses when friends get together to do things for their friends --
I'd like the DCU to avoid anything that looks at all like that.  But if 
"relationship banking" is based on the established relationship with the DCU, 
I feel we'll be reasonably safe from financial abuses or discrimination.

	Enjoy,
	Larry

No matter how this thing gets decided, employees who don't have a DCU branch
nearby, will probably never have what DCU will define as a 'relationship'.

For example, one of the reasons I don't have a DCU checking account is that
any check I would write on the account would be considered an out of state
check, since there is no DCU branch in Texas.  This means I couldn't cash a
check anywhere without opening an account at a local financial institution and
maintaining a balance sufficient to cover any check I might wish to cash.

I transfer money from my savings to my checking as cash flow requires.  I would
be unable to do this if I put my savings in DCU since I can't use a DCU checking
account.

The $6,000 loan with DCU is really bogus.  Suppose I buy a new car every 4
years and always finance $10,000 with DCU.  For at least one and probably 2 of
those years, my loan balance would fall below $6,000 and as far as DCU is
concerned, I would have no relationship with them despite financing a new car
with them ever 4 years.

Bob

    
    RE: .16
    
    Good reply Bob.  Those are some of the reasons I have a hard time with
    'relationship banking' as it applies to the Digital Credit Union.
    
    Some other problems I have with it are:
    
    -- Small borrowers/savers penalized --
    
    There is an underlying assumption here that DCU members below the
    'relationship' criteria are doing their primary banking elsewhere. 
    There are very real possibilities that these small savers/borrowers ARE
    using DCU as their primary institution, but just not enough to qualify
    according to DCU.  Is their money not as green?  Is their future
    business irrelevant?  Will their current $5000 used car loan be a
    $20,000 new car loan when they progress up the ladder over the years. 
    Scare or chase them off now, and there is little chance you will have
    their business down the road.  I guess what I am saying here is that
    any 'relationship' needs to nurtured and developed.  I just don't see
    that happening with 'relationship banking'.  And isn't that what credit
    unions were created for in the first place?  A place where the small
    person could go and get a fair shake?
    
    -- Singles vs. Households --
    
    Believe it or not there are many single people and single parents out
    there.  DCU membership is based on individual members.  I feel that
    using household totals when determining a 'relationship' automatically
    discriminates against those who do not have a second person to
    save/borrow in the 'household'.
    
    -- Relationship vs. Membership --
    
    Not everybody will agree with this one but I feel that the charter of
    DCU defines the field of membership.  I have a fundamental philosophical 
    problem with now applying economic factors to further divide the
    membership up into 'relationship' and 'non-relationship' members.
    
    -- Just plain BAD business --
    
    I think 'relationship' banking is micromanagement at its worst.  It's a
    very short-sighted, tunnel-view view of the bottom line.  IMO it is an
    attempt to define who you want to do business with and penalize those
    that you feel aren't doing sufficient business with you.  Any business
    must develop and nurture the relationship with its customer if it is
    to succeed.  I view this approach as trying to use a stick to develop
    that relationship.  A business that offers good value for the dollar
    and delivers quality service will have more 'relationships' than it
    knows what to do with.  You must treat people like they are more than just
    totals on a monthly statement.  
    
    And no matter what 'relationship' you pick, you'll inevitably end up
    chasing somebody's business to your competitor.  IMO a perfect example of
    that is DCU's current VISA policy.  Convenience users who are charging
    $4-6000 a year are being charged an annual fee because they don't meet
    the 'relationship' criteria.  But they can very easily replace the DCU 
    card with any one of a hundred no fee cards (and are doing so).  The 
    fact is that DCU is MAKING MONEY on them seems to be irrelevant!  Any
    business that would turn down $70 in income for a $20 annual fee needs
    its eyes checked.  But the credit card is being viewed as a goodie for
    having a 'relationship', not as a business that is evaluated on its own 
    merits.
    
    To me, the bottom line in all this is that DCU must develop and nurture
    its ever-shrinking customer base.  Every member is important, every
    lost opportunity hurts the membership.  If we focus too narrowly on the
    trees, we will not see that the entire forest beyond those trees has
    been harvested by our competitors.  DCU must work hard to develop what
    ever 'relationship' it can with each member.  Because as we all know,
    there are too many banks or CUs out there that consider DEC employees
    good customers.

    
    
      re .14
    
      I stand corrected - Thanks,  Tanya.   
    
      But if its true that 90% of the members meet the 'relationship'
    criteria,  is there really any advantage to going after the 10% who
    aren't?  
    
    						-al
    

 re .14

 >   This is not true.  According to DCU management, approximately
 >   90% of all deposits are above $3500 and 85% of all loans are 
 >   above $6000.  Thus, most members are "relationship" customers.  
    
Does the verb "are" indicate a snapshot at the end of one day?  How
many loan and deposit accounts met the minimums continuously for the
last twelve months, the way they would have to for the free VISA perk?

\Joe

    
    
    A member is a member is a member.
    
    Presently I have a relationship with ATT Universal
    and a mortgage company that gave me %6.02 fixed.
    
    cbc

   
    RE: 623.14
    
    Oops, I stand corrected.  Phil pointed out that the relationship
    data of 90% of all deposits are above $3500 and 85% of all loans
    are above $6000 applies to those members that have DCU credit cards.
    It does not apply to the whole membership.  Sorry if this caused
    any confusion.
    
    Regards,
    
    Tanya
    

>	Phil pointed out that the relationship
>    data of 90% of all deposits are above $3500 and 85% of all loans
>    are above $6000 applies to those members that have DCU credit cards.
>    It does not apply to the whole membership.


	This actually makes sense. DEFCU is effectively telling 
	members, "if you don't have $3500 in DEFCU deposits or $6000
	in DEFCU loans, we don't want your VISA business". And members
	are listening!

					Tom_K

    
    I like the idea of relationship banking very much but I have a
    BIG problem with the financial criteria.  I have the same view
    as does Phil.  I've never paid more than $9000 for a car and
    I never will.  The car loan that I currently have with DCU was
    originally $7200 and I will pay it off early.  At a savings rate
    of only 3% or so, I will ensure that I put the most I can into
    my SAVE plan and not let it sit in a DCU account.  I always
    pay my VISA bill in full each month, and my DCU line of credit
    balance has been $0 for months.  
    
    In short, the DCU will never get rich on my business, BUT when
    I do need credit I will deal with an institution that values my
    business and treats me as a business partner.  That means that they
    don't quote policy to me, but do business based on their experience
    with me.  They grant terms that still let them make some money on the
    deal but are also favorable to me because they know me and know what to
    expect from me.  If I'm just a number and they can't decide how to work
    with me without referring to a policy, then in the long run I'll go 
    elsewhere.
    
    Steve
    

	And one thing to remember about "relationship banking": a
	bank is in business to make money. If they want to make
	special deals with folks that make them a lot of money, well,
	business is business. But a credit union is not in business
	to make money, it is exists to serve the members. The questions
	that a credit union should ask is not, "can we make money on this?",
	but, "can we provide this service to our members competitively,
	and not lose money?".

					Tom_K

    
    RE: .24
    
	>"can we provide this service to our members competitively,
	>and not lose money?".
    
    Tom, I'm with you to a point.  DCU must 'make money' to survive.
    It needs to pay the bills as well as build up reserves (especially
    now).  I would prefer to re-phrase what you said to:
    
	"can we provide this service to our members competitively,
	 and not be greedy?".
    
    A win-win situation IMO.  The membership gets value for their money,
    DCU 'makes some money'.  Granted, it'll take longer to build up
    reserves than pricing products higher, but you'll end up with a satisfied
    membership that comes to the credit union FIRST to do business.  Repeat
    business is the cornerstone of any successful business and in this
    case, credit union.  So while you make less per transaction/member, you
    more than make up for it in increased volume.
    
    And of course quality of service plays an important role in the picture
    too.  I consider that to be a given no matter what the business.  
    

	I think we are in agreement, Phil. When I say, "not lose money",
	I'm including putting aside reserves and the other things you
	mention. They are part of the cost of providing the service.
	I count that as the DCU not making money, unless it becomes
	excessive.

					Tom_K

    As owners of the DCU, don't we want it to make money so we in turn make
    money?

Well... if the DCU issued dividends to members, then yes, we'd want
it to make more money so that we get bigger dividend checks.  The 
alternative is to spend the profit (after taking some for the
reserves) by offering lower loan rates, higher deposit interest, 
better service, and so forth.

Either way, the DCU making money translates to the members making
money.  On the whole, I prefer the latter method, rather than dividends.

	Enjoy,
	Larry

>Well... if the DCU issued dividends to members, then yes, we'd want
>it to make more money so that we get bigger dividend checks.  The 
    
    Some of us remember when DCU did issue dividends. It wasn't always the
    same way though. Sometimes it was as extra interest on deposits.
    Sometimes as reduction of principle on loans. At least I think those
    happened. It's been a long time. :-(
    
    			Alfred

    
    Re: .25
    
    > A win-win situation IMO.  The membership gets value for their money,
    > DCU 'makes some money'.  Granted, it'll take longer to build up
    > reserves than pricing products higher, but you'll end up with a satisfied
    > membership that comes to the credit union FIRST to do business.  Repeat
    > business is the cornerstone of any successful business and in this
    > case, credit union.  
    
    This is precisely the point that Deming makes.  The first and foremost
    aim of any business should be first to stay in business and continue
    to provide service to its customers and jobs to its employees.  It is
    repeat business that makes you the profit because the cost to you to
    get that business is much lower.  There's much more to it, but I refer
    you to anything by or about Deming if you want to find out more.
    
    > So while you make less per transaction/member, you more than make
    > up for it in increased volume.
    
    Not necessarily.  You may not get increased volume, but what you will
    get, which is not immediately measurable or knowable, is more future,
    i.e 'repeat', business which ensures the long term viability and
    stability of the DCU.  Going after short term profits is the beginning
    of the road to bankruptcy.
    
    Steve
    
    

    
    RE: .30
    
    Hmmm....  Never read Deming.  What I wrote is based upon my personal
    experience in a family business and dealing with customers
    face-to-face on a daily basis.  Anybody who is involved in selling to
    people must experience it first-hand IMO.  Reading textbooks about
    selling isn't the same.
    
    The increased volume I was referring to was the business that you will
    now be taking from your competitors, ie. new business.  There is a lot
    of business DCU members are taking elsewhere for various reasons.  We
    must determine those reasons and then eliminate them.  I believe one of
    these is 'relationship banking'.  However, this 'relationship' is
    defined by DCU in a savings/loan amount.  WRONG.  The customer
    determines the 'relationship' they want with a business based upon the
    value they get by doing business with the credit union.  You see, there
    are hundreds of other businesses that are ready, willing and able to
    welcome you thru their doors.  When DCU puts up a sign that says:
    
    	"Relationship Required:  $3500 in Savings or $5000 in loans"
    
    they turn valuable future customers away.  Those that can't meet those
    requirements at this point in time.  Yet a few years done the road
    they would be a valuable customer.  Once a customer has been turned off
    or treated badly by a business, it is difficult, if not impossible, to
    regain their trust and business.  Considering DCU has a limited
    customer base (and it is shrinking every day), it cannot afford to pick
    and choose who it will have a 'relationship' with.  It needs to get and
    keep every customer that walks thru the door.  It must realize it is
    the suitor, not the suitee.
    

    
    Re: .31
    
    What DCU has decided upon as the definition makes it clear that it
    is NOT a relationship but a business deal.  They have carefully
    calculated beforehand that they get a profit out of it.  The customer,
    however, gets no such guarantee that it will be a relationship to 
    his/her benefit as well.  Frankly, if I were looking for a new place
    to do banking and say that, I'd pass.
    
    Steve
    

This is one example of a membership that may fall into the 2m$ loss status:

I have an account joint with my dad so that I can handle his legal affairs.  It
doesn't get much activity.  My accounts do.  This raises a question; how does
the level of inacitive status get count.  If its counted by just the number of
accounts with avarage balance below x then this may be a good time to rethink
how the membership uses the DCU.

o How was the 2M$ loss estimate calculated?

o What would the loss be if only those account were counted that had no other
  members on the same badge number with a relationship?

I would like to see the cost structure change only for those accounts which there
are 0 members on the badge with a "relationship".  Does this make sense?  This
way folks with no account activity will be motivated consider whether they
have a need to use the DCU at all.

My wife it joint on my account but does not have a separate membership.  She
would only desire to become a member in the event of my untimely death.  In
this event would she have the opportunity to establish a membership?  How long
would she have to do this?  Perhaps if folks understand the answer to these
questions they would not be motivated to keep placeholder accounts.


This diagram is a loose "relational" view of the membership.  My recommendation
is that some accounting gets done from the top (employee) level prior to
establishing policies around the cost structure.

			1 Employee Badge
				.
				.
			Memberships 1 for Employee plus 1 for each interested
			relative.
				.
				.
			n accounts per membership (have non-members as joints)
 

Now that I've also read Chuck's letter in the Network newsletter, I'll jump into
the fray.  I'm really concerned by the tone Chuck uses, especially by the fact
that he seems to have a banker's point of view.  We are added to our reserves at
a phenomenal rate.  Pretty soon we'll be at 8%, which I think he said was the
standard for credit unions.  This credit union has always done well financially,
with the only exception being the chunk of change Mr. Mangone and friends stole
from us.

So what is he after?  Is one of the goals to reach 8% as soon as possible?  What
will happen after we reach 8% in reserves?  Will these fees and requirements
vanish?  Or will the privileged few who have the "right" accounts and loans get
huge dividends deposited into the account of their choice?

I have more thoughts, but I'll separate the replies.

Elaine

    
    
      This is starting to sound like the old "Soak the Rich"  speech,
    where they wait until after the election to mention that they 
    consider just about everybody to be rich...  :^)
    
    Chuck keeps talking about a "relationship",  but thus far,  I
    haven't seen any concrete statement about just what he considers
    a satisfactory relationship to be...
    
      Back when all the trouble started,  I moved to another credit
    union that offers vastly superior service in all areas.  I've been
    slowly accumulating money back in DCU,  but at 2.8%,  it hardly
    seems worth the effort,  and until stuff stabilizes at DEC,  
    I'm not really looking to borrow any money...
    
      If Chuck wants $1000 on deposit,  I can do that.  If he wants
    %10,000 on deposit (at 2.8%)  he's going to have a hard sell...
    
    
    						-al

    I have an account with DCU only because it's requirement of membership.
    I used to have a DCU credit card until DCU decided that they weren't
    making enough money off the transaction fees on ~$4000/year and ~$400
    last year in interest charges, and wanted an additional $25/year as a
    card fee.  My other credit union seems to like the income.
    
    Why does Chuck/DCU seem to be trying to drive members away?
    
    Bob

    re: .36 -- Visa card
    
    My thoughts exactly.  I have had a DCU VISA card for a number of years,
    but I'm planning to cancel because I can get a better rate *with no
    annual fee or balance minimum* at a regular bank.  I just don't see the
    incentive to use the DCU card.
    
    	Steve

�    I have an account with DCU only because it's requirement of membership.
    
    Now there's a novel idea.  A Credit Union that requires you to have an
    account to be a member.

    re: .38
    
    Well, the last time we went thru this 'relationship' mess, DCU was
    complaining about the high number of low balance accounts.  I'd be
    happy if I could be a member without DCU having any of my money, but
    it's their rule that says they want $5.
    
    Bob

    Bob, I'm still confused.  Why would you want to be a member of DCU but
    not have an account?

    
    Well, maybe people who aren't near a branch can't use DCU a primary
    institution but would still like to avail themselves of other services
    that geography doesn't hinder, such as credit cards, car loans,
    mortgages, etc.  These share accounts are required by the NCUA and I'm
    sure many wouldn't mind closing them and thus save DCU money.  Just my
    guess anyways...

    re: .40
    
    Phil has it right.  I can't make DCU my primary financial institution
    for reasons discussed elsewhere.  Because DCU doesn't make mortgage
    loans in Texas, I'm more or less limited to credit cards, car loans,
    and CDs.  I think I've beat the credit card issue to death.  When it
    comes time for a new car loan in 3 years, I'll give DCU a look, but
    they weren't very competitive last year when I had another credit union
    offer to pay off my car loan from a 3rd credit union and cutting the
    interest rate .5% with no fees to get my business.  I don't have a CD
    anywhere, so that's out too.
    
    So, I keep my $5 in my account and hope that someday DCU will want my
    business bad enough to get it.  I REALLY do want to help DCU succeed,
    but they are making it almost impossible to do.
    
    Bob
                            

    
    I guess this was the right note for my point about the relationship
    paradigm.  The tone of the way it was expressed in the recent mailing
    is very much like the "negative sell" i.e. before we sell you this
    product convince us that you're good enough to be one of our customers.
    It is nothing less than arrogant and reminds me of the tone of the
    DCU as led by the previous BOD.  It is most definitely *not* the
    way to get more of my business.
    
    We changed the BOD but has the attitude of the DCU changed with it?  
    I'm not saying this as a slam at the current BOD but perhaps to give
    them something to think about.
    
    Steve
    
    
    
    Steve
    

    Yes, there is a difference between DCU and the BoD.  A lot of the
    activities of DCU that we may be dissatisfied with are simply the
    modus operandi of the DCU management.
    
    Remember, too, that while we are not seeing loud dissent amongst
    board members, it is undoubtedly certain that there must be some.
    It would not be very good, however, for Board members to appear in
    here, slamming one another.
    
    Since some of the Directors are not participants in here, it seems
    likely that they do not read in here either.  It would probably be
    a good idea to address any complaints about the seeming lack of BoD
    direction to management regarding the level of customer service and
    so on to all the board members by other mechanisms, such as e-mail.
    
    Complaints in here are only addressed to those Directors who have
    participated.  Remember there are more members of the board than
    just Phil, and some probably with their own agenda.
    Look in the minutes to see some of the directors in action.
    
    Stuart

Recently I sent a note expressing my concerns about the latest
"relationship banking" message to all the members of the DCU
Board of Directors.  I received 4 responses to the note. One
each from 3 members of the board and one from the President of
the DCU.

My concerns were:

	o  that "relationship banking" is a euphemism for more
	   and higher fees, 

	o  the credit union made $ 4.9 million last year and is
	   even talking about increasing fees, 

	o  the DCU is sounding more and more like a bank, even
	   with benefits that banks do not enjoy.  These benefits 
	   include Digital Equipment Corporation's provision of 
	   services which reduce the operating expenses and the 
	   tax-exempt nature of a credit union.

The response from one of the board members indicated who DCU 
views as the competition.  To the DCU, their competition is the 
following banks: Fleet, Shawmut and Baybanks. 

The response from Chuck Cockburn was enlightening.  I encourage 
everyone who shares my concerns to contact the board and Chuck.   
Chuck and I talked on the phone for about 30-40 minutes.  His
response included the following information:

	o  the DCU's loans are growing at 20% this year which is
	   better than other credit unions.   The default rate is 
	   lower than would be expected with the layoffs.

	o  he thinks the capital ratio should be "at least" 8%, 
	   he'd like it to be higher.  He later said that the
	   strategic DCU plan calls for it to be 8%.  The average 
	   capital ratio for credit unions is 8%.  He thinks
	   DCU's should be higher so it can be best-in-class.   I 
	   mentioned that if it was average, then the money that 
	   he'd put toward retained earnings could be returned to
	   the members.  He did not seem interested in exploring 
	   this topic further.

	o  he never denied that "relationship banking" means more 
	   fees.   All of his statements implied that it did mean 
	   more fees and probably higher minimum balance 
	   requirements.  Interestingly enough, he also said that
	   it is cheaper to keep current members and sell them
	   additional services than it is to get new members.  He
	   did not answer my question of what he was
	   going to do to find out why current members were not
	   fully using the DCU services.  In fact, he seemed
	   rather disinterested in even discussing that approach.
	   He also didn't want to discuss my views that members 
	   would not receive this message well and the DCU may
	   well drive members away by instituting fees. 

	o  it seems his only problem with the fees that were
	   announced 2 years ago is the way they were going to be 
	   implemented.  He seems to have no problem with fees,
	   if they're implemented correctly.

	o  the $ 2 million that the DCU "loses" on 
	   non-relationship members is based on a theoretical 
	   profitabililty model developed by DCU.  DCU determines
	   the profitability of a particular product and inputs
	   it to the database.  The software then manipulates the
	   data and determines how much money is "lost" on
	   non-relationship members.  In other words, it's not
	   the actual cost of carrying those members. 

As a result of the responses received so far, I'm still not happy 
with this direction of the credit union.  It boggles my mind that 
the DCU could have made almost $ 5 million last year and still 
feel the need to hit the members up for more money in the shape 
of fees.  Wonder what they need it for?

Maryellen

    I say, NO FEES!  The idea of introducing fees while the DCU is making
    millions is an INSULT, as far as I'm concerned!  If they really do
    introduce fees, they will face a rebellion as strong as the one that
    was barely averted not that long ago.  If the BoD approves fees, I want
    to know who votes for them and who votes against them.  With BoD 
    elections coming up, that kind of information will have a strong 
    bearing on who I'll be voting for.
    
    Steve

If DCU directors feel that their competition are the local comercial banks then
they are going about winning new business the wrong way.  You don't want to be
the same as a bank, you want to be as different as possible!  Compete
agressively in the areas where banks cannot.  Use those assets that give DCU an
advantage and use them aggressively.  If we have a better than average default
rate, great!  Factor that into the rate structure and lower loan rates further,
which should increase the number of loans DCU writes, thereby increasing profits
(and possibly the size of the membership as well.)  Apply the same principles to
each of the assets our surprisingly stable membership supplies, and DCU (and its
members) will reap the benefits for years to come.

    Has this string ever described what a 'relationship' really
    is?  Could someone state it again?  Also...could someone
    state the sorts of accounts that REALLY lose money and those
    that do not?

    We've portrayed those without a 'relationship' as costing the
    membership real money.  Then, someone said that they DONT
    drain money from the DCU, but they just appear to according
    to an invalid profit model someone inside DCU came up with.

    I have a small amount of money taken out of my pay check
    every week and deposited in my account.  I view this as
    my 'car' account...car payments in advance.  When I need to
    buy a car, I use this as the down payment and borrow the
    rest from the DCU if its not enough.  At first there is very 
    little in this account.  It slowly builds up...and all too soon
    has nothing again.

    So, I have no relationship with the DCU.  Should I view myself
    as 'costing' the DCU money?  Aren't I exactly the depositor
    they want?  Wouldn't it be GREAT for the DCU if every DEC employee 
    had an automtic withdrawal into their DCU account?
    bob armstrong

    I don't know what the formal definition of having a "relationship" with
    DCU is.  I have had a savings account and an active checking account
    with DCU for more than 7 years.  Seems odd that given this I would be
    considered to not have a "relationship" with DCU.
    
    Steve

As far as I know, the DCU has not officially defined a 
relationship.  My inference from my discussion with Chuck 
Cockburn is that it will involve a minimum balance of $3,500.  
This may be savings accounts or loan balances.  If you really 
want to know, I suggest you call him up and ask.

Maryellen

Re: Note 623.48 by EOS::ARMSTRONG 


>    Has this string ever described what a 'relationship' really
>    is?  Could someone state it again?  Also...could someone
>    state the sorts of accounts that REALLY lose money and those
>    that do not?
>
>    We've portrayed those without a 'relationship' as costing the
>    membership real money.  Then, someone said that they DONT
>    drain money from the DCU, but they just appear to according
>    to an invalid profit model someone inside DCU came up with.

DCU management, to my recollection, has not officially described
what a relationship is.  Also note that it is the DCU management
that is portraying accounts without a "relationship" as costing
approximately $ 2 million.  Cost in this case seems to mean
"profit we aren't (but should be) making on these accounts" as
opposed to "money out the door to support these accounts".  It
could mean the latter, however, that was not my sense based on my
conversation with Chuck Cockburn.  I'm sure if I got it wrong,
I'll hear about it. 

Also note that I did not say that the DCU profit model was
invalid.  Only that it seems to be a theoretical profitability
model and not necessarily a model which captures the actual costs
associated with the "non-relationship accounts". 

Maryellen

    Phil posted the DCU definition of a relationship back in 623.11.
    
    

    
    Re: .45
    
    
    > I mentioned that if it was average, then the money that 
    > he'd put toward retained earnings could be returned to
    > the members.  He did not seem interested in exploring 
    > this topic further.

    If this is his attitude when conversing with a customer/owner,
    it may be time to give Chuck his walking papers.  His view is
    one thing, but being unwilling to discuss it is not acceptable.
    
    > Interestingly enough, he also said that it is cheaper to keep
    > current members and sell them additional services than it is
    > to get new members.  
    
    This is a well-known Deming principle.  Real profit comes from
    repeat business of established customers.  What Chuck does not
    seem to understand is that keeping current members means that
    you have to give them what they want and not what you'd like
    to sell them.
    
    > He did not answer my question of what he was
    > going to do to find out why current members were not
    > fully using the DCU services.  In fact, he seemed
    > rather disinterested in even discussing that approach.
    
    Again, this attitude does not speak well for keeping Chuck
    around much longer.
    
    > He also didn't want to discuss my views that members 
    > would not receive this message well and the DCU may
    > well drive members away by instituting fees. 

    He may not have wanted to talk with you, but he isn't going to
    be able to duck this for long.
    
    >  the $ 2 million that the DCU "loses" on 
    >  non-relationship members is based on a theoretical 
    >  profitabililty model developed by DCU.  DCU determines
    >  the profitability of a particular product and inputs
    >  it to the database.  The software then manipulates the
    >  data and determines how much money is "lost" on
    >  non-relationship members.  In other words, it's not
    >  the actual cost of carrying those members. 

    This is a classic cost plus business model.  The idea is
    simply that I add up what it is costing me, decide how much
    profit I want and add the two together to get the asking price.
    The comes when you find that the customer doesn't see it your
    way and does business elsewhere because you aren't being
    competitive.  
    
    > As a result of the responses received so far, I'm still not happy 
    > with this direction of the credit union.  It boggles my mind that 
    > the DCU could have made almost $ 5 million last year and still 
    > feel the need to hit the members up for more money in the shape 
    > of fees.  Wonder what they need it for?

    Need has nothing to do with it, but greed might.
    
    It seems that the proverbial stuff might be hitting the fan before
    long.  This kind of attitude is precisely what prompted the revolt
    just two years back.  I doubt that sentiment for it has gone away.
    Beware, Chuck.
    
    The DCU can only lose proceeding this way.  I think one of two things
    will happen: their feet will held to the fire again or in two's and
    three's memberships will drop steadily as people get fed up and go
    to other sources for their needs.
    
    Steve
    

    Analyse the situation on the board and tell me if you think you
    could convince enough of the board members to change the president's
    policy plans or replace the president.  Personally, I don't think
    you can.  I'd love to be convinced that all the board members were
    listening intently enough to realize that user fees were the start
    of the demise of the previous board.
    
    

WHEN THE BOARD WAS OVERTHROWN LAST YEAR  the cause was pretty much the things 
done by and at the direction of  the President of the DCU.  

Is there a possibility that the source of the problem is still here ?

    I believe that the membership would not have noticed the fees and other
    changes that were made if it had not been for the illegal activities of
    the former president.  The former board removed him for his illegal
    dealings, and then they received the wrath of the members for allowing
    it to happen.
    
    re: .55
    
    Are you implying that the current president is doing anything illegal?

    re: .56
    
    I respectfully (really!) disagree with part of the statement.  I agree
    that the former board suffered the wrath of members for allowing
    illegal dealings to happen.  But, I feel it was the attempted
    introduction of fees that really got people active.  I feel that if 
    fees are introduced again, a similar "revolt" will be in the making.
    
    Steve

    
    I agree with Steve. My involvement in seeking a more responsive board
    was triggered by the infamous "Henry Ford" flyer, which had everything
    to do with fees and didn't even mention Mangone.
    
    Hmmm... "Lifestyles" to "Relationships" -- no much progress evident
    here.
    

    No question, "NO FEES" became the rallying cry for the masses that
    attended "The Meeting".  In my case, though, it was the day that I read
    the news that Mr. Mangone had been dismissed that I put this conference
    in my notebook and started questioning the safety of my money.  I
    wonder what started Phil G.'s activism?
    
    The point of my note was to challenge the Noter that says Mr. Cockburn
    (like Mr. Mangone) is to blame.  He does not explain his comments, nor
    produce any evidence to back them up.  Unchallenged, it's a mark
    against the reputation of our credit union president.  I see no need
    for it.
    
    Mark

    
>    I wonder what started Phil G.'s activism?
    
    	Well, I had been an active participant in this conference for quite
    a while.  I had also been a DCU member since joining Digital.  When the
    story of DCU's president hit, everything had pretty much been kept
    under the rug by the old BoD.   When the checking account fees hit,
    things just didn't add up so I started looking at financial statements
    and that is when I asked DCU for the full audited financial statements,
    including footnotes.  That was where it was discovered we had already 
    lost big bucks on Cape Cod real estate "investments".  The rest is history.
    

    The President has very strong control over the operating policies of
    the credit union and this includes such things as fees and concepts
    like relationship banking.  The directors are responsible for
    representing the members interests, however, the President is given
    very strong powers (and the last board ensured that even stronger
    powers were given to the proesident) in the operation of the cu.
    
    As such, therefore, the president is should be held highly responsible 
    for any operational policies.  The directors (note that I am talking
    directors on an individual basis here because we have a board now
    comprised of direcotrs with varying opinions and so on) should be
    held responsible for not conveying the feelings of the membership
    at large in controlling and directing the policies of the president.
    
    Now, if we as members have not conveyed our displeasure at the
    president's concept of rlationship banking and fees to the
    directors, then it becomes our responsibility.  Apparently, since
    many of the board members do not note in here, then we should
    register our displeasure by sending mail or some other direct
    communication.
    
    Stuart

    
    Re: the old bod incurring the wrath of the membership.
    
    I disagree with the idea that the membership were angry with the
    previous bod because of their mistakes.  It was their general
    arrogance and unwillingness to be responsive to inquiry from the
    membership that incurred the wrath *and*, IMO, led their being
    turned out of office.  If they had responded with an attitude 
    like Phil G's as he responds to us in this notes file, I think
    any who cared to be, would still be in office.
    
    Doctors have known for a long time that patients don't sue because
    you screwed up.  They sue because you ticked them off in doing so.
    
    Steve
    

    well, we disagree alot, Steve.  But in my opinion, even Phil would not
    stand a chance if it ever turned out that illegal activities occurred
    while he was a director.  Arrogance and responsiveness are simply
    defenses for something that was indefensible.  Another president,
    named Nixon, comes to mind...
    
    Mark

    
    Re: .63
    
    > well, we disagree alot, Steve.  
    
    Perhaps.
    
    > But in my opinion, even Phil would not stand a chance if it ever
    > turned out that illegal activities occurred while he was a director. 
    > Arrogance and responsiveness are simply defenses for something
    > that was indefensible.  Another president, named Nixon, comes to
    > mind...
    
    And in this case also, Nixon's demise was not because of others
    wrongdoing on his watch, it was because of his own actions in helping
    to cover them up.  The scandal was more over his participation in the
    coverup than over the breakin itself.
    
    fwiw,
    Steve
    

    
    Actually, the old Board did or didn't do enough to pretty much tickoff
    just about everybody.  It seems some people were affected by some
    things and other people by other things.
    
    I believe where they might have made the initial mistake was not
    realizing that DCU members own DCU.  If they were going to "invest",
    then they should have been "investing" in the membership by ensuring
    loan approval rates were adequate and DCU rates competitive enough to
    generate demand.  There were far too many horror stories about members
    being turned away while a walk down the street to a competitor would
    result in a loan.  While a Director needs to provide direction, they
    also need to keep a hand on the pulse of the membership.  Without the
    pulse, the direction chosen could be a mistake.  
    
    But what of all the very convincing "qualifications" of the old Board?
    Well, IMO these "qualifications" didn't seem to serve them or us well. 
    All the fancy "qualifications" in the world won't amount to a hill 
    of beans if a person thinks a credit union should look, talk and act 
    like a bank.  Hopefully we have learned our lesson and will ask about
    credit union specific issues and not "qualifications ".  If we haven't
    learned then we shouldn't be surprised to find that DCU isn't the 
    CREDIT UNION  we think it should be.

If memory serves, the membership voted at the Special Meeting to overturn
the fee structure, and to prevent the imposition of fees on basic checking
and savings.  From what MaryEllen has written, it seems to me that President
Cockburn is once again on the path of imposing fees.  And to me it seems
like there's very little that Paul Kinzelman or Phil Gransewicz can do to
prevent the board from agreeing.

I want to know where the current board stands with regard to the viability
or lack thereof of the passed motion to forbid fees on basic checking.

./chris

    Given that not all of the directors wishes to take part in here,
    it seems a little futile to ask them in here.  It would make sense to
    ask them in mail and ask if you may post their position in here.
    
    Stuart

    Well, I took the bull by the horns yesterday morning and sent a mail
    message to the directors.  I quickly heard from Paul and Phil.  I have
    yet to have even an acknowledgement from anyone else.
    
    Stuart

    
    Re: .68
    
    I also sent a note to the BoD and had precisely the same experience
    as you did.
    
    Steve
    

�From what MaryEllen has written, it seems to me that President
�Cockburn is once again on the path of imposing fees.  
    
    I didn't know he ever left it.  I seem to remember that the
    implementation of fees was halted prior to the Special Meeting but they
    would be investigated further.

I think the President and the Board of Directors would have to be stupid to try
to impose fees on the members, after what happened two years ago.

So going with this assumption, I tried to think of what relationship banking
could mean without using fees.

My principal bank, North Middlesex Savings in Ayer, has a program called
Easy<something> (I can't remember exactly).  If you have an Easy savings
account, and you sign up for an Easy mortgage, you get a reduction on the
interest rate for the mortgage.  Likewise, if you have an Easy loan, and you
open an Easy savings account, you get an extra 1/4% (I think) interest rate on
the savings account.  I never asked if any of my accounts there qualify, but I
don't get any bonuses there now.

IC FCU in Fitchburg also has a relationship program.  If you put your savings
account on the same statement as your NOW account, you get an extra 1/4%
interest on the savings account.  It is one of the higher interest rates for
statement savings (lower than DCU, but it pays interest monthly).

I'm opposed to the term relationship banking, which implies that people who
don't meet the criteria are pond scum, but a program which gives bonuses for
extra business could encourage more people to bring their business to DCU,
instead of some other financial institution.

Elaine

What Elaine says in .72 is absolutely right on.

It seems that there are two ways to get the horse to do what you
want...you can beat it with a stick, or offer it a carrot.  DCU has
consistently shown the "we *will* beat you with a stick because we're
the credit union and you're not" attitude as regards the issues of fees.

If they want the big depositors and people to be all cozy with them,
why not offer incentives?

People will respond to the carrot....not to the stick.

I *still* am of the belief that there is a binding resolution, passed
by the membership in a properly called and convened Special Meeting,
to not fee the membership for basic checking.  Whether DCU's management
chooses to acknowledge it or not is irrelevent.  Should they move to
institute fees, DCU needs to hear LOUDLY from the membership that we
believe they are bound to the will of the ownership.

./chris

While I dislike bakning fees, I wonder if maybe there might be justification
in the current economic climate to increase the CU reserves by some kind of
fee structure that can be adjusted as the need requires ... to zero in good
times.  Clearly the Mangone affair hit the CU reserves hard and it would
be good to increase those reserves in case of higher loan losses due to
the fortunes of Digital.  Moreover, there may come a time when Digital is
not so benevolent of providing facilities and services to DCU.

Either we pay for our banking services by direct fees or by the spread
of interest rates between savers and borrowers.  If there are no fees,
it could be that we end up with a wider spread.  Then you sock it to
the savers with lower interest rates who then take their money out and
put it elsewhere, or you charge more for loans and then people don't
want to borrow from DCU ... no money in ... no money out ... the demise
of the CU.

Why should savers and borrowers alone pay for the bulk of our banking
transactions ?  Clearly, to some extent the savers are those people with
chequing accounts and they are paying some of the costs, but not entirely.

The factors that define anyone's relationship with a banking organization
are wide and varied ...
1) their balances
2) their loans
3) their activity

Some of these relationships are more profitable than others.  Low balance
high activity cost the CU more than high balance low activity, unless their
are loans in the picture.  Clearly the relationship model is extremely
complex and a for profit organization's relationship model is going to
be different from a non-profit organization's model.

This model is so complex.  Clearly the fact that the DCU membership is
now sensitive to fees must also be rolled into the equation.

What a headache!

Stuart

    Well, I got a phone call from Julie at DCU regarding the matters
    of relationship banking and policy making at DCU.
    
    Seems my note to many of the directors was not acknowledged or
    answered personally by them, but instead passed off to DCU communications 
    to answer, in spite of the fact that I asked for their personal stance.
    
    I think the least this is a clear indication that a lot of the DCU
    policy is probably being left to the DCU management by many members
    of the DCU board.  This does not seem very satisfactory, and will
    certainly be reflected in my voting as these posts come up for
    re-election.
    
    Stuart
    
    

    
    Re: .76
    
    I think your assessment is likely correct.  It should have
    occured to them that if you had wanted to communicate about
    this with DCU management that you would have sent the note
    to them to begin with.  OR, worse perhaps, that *did* occur
    to them.
    
    Steve
    

    
    
    re: .76..
    
    Maybe you should send a "response" to all the BOD, thanking those that
    gave input (don't single anyone out though) and then stating that for
    the others who "just passed the buck to DCU", tell them that you could
    have called the DCU yourself, but that wasn't the point of you asking
    them for "their opinion".   tell them to check out this note in the
    notesfile and to 'note' how much everyone is confused by and dislikes
    the concept... A gentle reminder that this notes file does have great
    power could go a long way in getting a genuine response from those
    BOD's that have abstained from responding...
    
    
    Just a suggestion..
    
    	John
    

    re: .79
    
    That 'direct deposit' qualifier made me smile.  I guess I'll be
    keeping my DCU accounts after all!
    
    	Steve

    That thought about it being cast in stone was something that crossed
    my mind as I spoke with Julie.  I allowed Julie to say what she
    had to ... after all she was only the messenger.  On the other
    hand, it just asserts my claim that the tail keeps attempting to
    wag the dog ... it looks like they seem to think the BoD will
    simply ratify the management concepts of relationships.
    
    I for one very much dislike this concept of relationship banking
    as defined.
    
    This relationship has created several classes of DCU members ...
    and it looks more like a bank than a CU.
    
    Even my commercial bank sets a no charge chequing limit of $1000
    
    Hmmmm
    
    Stuart

    
    One of the problems I see with this is it's kind of like taxes..
    
    Let's say today the avoidance rule is A, B, C, or D... Everyone's pretty 
    much happy because they fall into the rule...  Well someday, they'll look
    at the "income" generated by this and say, well let's change the rule
    slightly (we can do that now, we have the "relationship" approved) so
    that the avoidance rule is [(A or B or C) and D]... Here's the question of
    the day, will the new "rule" have to be ok'd by the BOD, or not?
    
    Who's to say that someday the $500 limit won't get modified to $5000?
    This could mean (using the new formula), that as long as you have
    a $xxx balance, or a $xxxx loan balance, or a CD balance of $xxxx and
    you have more than $xxx in direct deposit, you can avoid the fee...err
    relationship charge...
    
    As I see it, the "relationship" will now become "policy" and policy
    can be dictated by the president, right?  What kind of assurance will
    we get that any change to the "formula" would have to be OK'd by the 
    BoD? 
    
    Does anyone know for sure?
    
    Also, let's call it what it is "Fee Banking"
    
    One last question... Will this be discussed under the guise of "Executive
    Session" so we all can't see who voted for what?  or will it be 
    dicussed under normal session so we can all remember who voted for
    fees and not vote for them the next time.
    
    
    This is exactly the reason why I left the "bank"...  too many fees...
    
    
    John
    

As I put it, fine, they need to build reserves (or at least the president
sees a need) ... so they implement some fee structure.

Later, when the reserves are built up, the fees will then go into the
pot available or interest dividends, which are returned to us ... and
are now taxable!  We will literally be taxed on the fees they decided
they overcharged us (uhhh  gave us back as dividends).

To be honest, I wouldn't mind seeing no interest, or a tiered interest
structure on chequing accounts rather than fees.  Tiered interest would
solve the matter of low balance accounts not being hit with
charges, and encourage people to keep bigger balances, as opposed to
whipping them for maintaining low balances, or not having loans.


The idea of direct deposit creates instantly second class members ...
what about those members who are no longer with Digital and able to
get direct deposit, and yet have a regular deposit ?  Why should DCU
discriminate against them ?


This gets worse and worse, not better.


Stuart

I have a few problems with this concept of fees .... umm,
relationship banking.

One, the DCU had a PROFIT of $ 4,900,000 last year, without
fees.  All of this money went into the 'reserves' (owners
equity).  Every one of the board minutes that I recall reading
says that income (profit) this year is higher than budgeted.  
What are they going to do with the extra  money the fees will
generate?   Assuming anyone stays around to pay them, of course.

Second, from the tone of the notes in here (and my conversation 
with Chuck Cockburn) this seems like a done deal.  Did I miss the 
Board meeting minutes where this was discussed, voted on and the 
votes of the Board members recorded?

Third, this type of activity drives me and my business away.  
This stuff is why I typically don't like banks, and absolutely 
don't like the ones DCU considers their competition (Baybanks, 
Shawmut and Fleet).

Fourth, my note on this issue to the members of the Board was 
answered by 3 of them and Chuck Cockburn.  I didn't send him a 
copy of my note.  This seems to be typical of the experience of 
other members who've written -- board members passing 
responsibility for responding to member concerns to DCU management.  
Why isn't the Board more concerned with these policy issues?
 
Maryellen

    Well, lets, see...
    
    I'm not under 18, nor over 65...
    
    Last year, I moved my checking to another institution (and my direct
    deposit with it...)
    
    Just recently dipped into my savings to buy a car, so there isn't
    enough there...
    
    But I did borrow 3000 or so to buy that car. Oh, that's not enough
    either...
    
    Nope, guess I don't have a "relationship" with the DCU.
    
    Good thing, too.  I won't need a divorce when I take my "business"
    elsewhere.  DCU can keep the "relationship", and some institution that
    DCU doesn't consider to be a competitor will get my business.
    
    Rich
        

    
    this is certainly against the trend. In Colorado Springs the local
    banks have started offering lifetime fee-free accounts. DCU will be hit
    hard in Colorado IMHO if they go ahead with fees. Certainly the
    definition of a relationship is wide, but it seems so wide why bother
    with a relationship? Unless, like somebody earlier said, the DCU
    managers will later tighten the screws.
    
    Simon

I'd rather see graduated interest (the more money, the higher the interest).
The first time I get charged a fee is the last time I use DCU.  [I'm the ideal
DCU customer.  I keep more in DCU than I should because I'm too lazy to move it
to a more profitable place.]

I've been using DCU as my primary financial institution for over 5 years.
I have a DCU VISA and IRA (before that got zapped by Congress).  I've had
loans before.  I'd take out a loan with DCU (refinance my truck, etc.) but
I find DCU way to cumbersome to deal with.  They know my income, they know
how much money I have with them, they see how much goes out each month.

I should be able to call them up and say "I'm <me>, badge <#>".  I have a
<199x Forboz Truck with $XX,YYY left on it.  I'd like to refinance for n
months.  Can you send the papers to sign?".

But no, I have to fill out a long form that rival a Top Secret personal
security questionaire.  Somehow I never get around it; I always something
better to do.  And DCU loses out of some money.

DCU is an institution of convenience.  That is their niche.  Don't make things
painful or people will go other places.  Make DCU an easy place to get things
done that has competitive rates and people will use DCU.

    
    
    Is it time for several hundred of us to attend a BoD meeting and
    remind them of what the membership had to say on fees two years
    ago?
    
    Steve
    

This situation is unbelievably absurd.   It's like dejavu all over
again, and I don't like it much.

When DCU first decided that fees needed to be instituted, they insulted
the entirety of the membership with the famous Henry Ford "More Options,
More Choices" brochure.  In case the current Board and management of
DCU has forgotten their history, this single event was the catalyst that
sparked the Board recall movement and ultimately led to the Special 
Meeting and Special Election.

At the Special Meeting, the membership voted in a properly called and
properly constituted meeting to turn back the concept of fees on basic
checking and savings accounts, and to prevent the imposition of such
fees at a later date.  Without regard for any actions taken by DCU's
management at that time (such as agreeing to not implement fees "at
this time"), or any comments made by the Board during the meeting (one
board member claimed that the notion of rolling back fees by the membership
was "illegal"), my claim is that there is a binding resolution in 
force at this time which compels DCU not to institute fees on basic
checking and savings.  

Now we have DCU on the record describing their intentions to establish
"relationship banking."   In my opinion, this amounts to nothing more than
Yet Another Glitzy Attempt to sell the membership on the notion that fees
are good for them.

As Maryellen has pointed out, DCU turned a substantial profit last year.
In fact, DCU had A RECORD YEAR last year.   The almighty capital ratio
that Mr. Cockburn is so devoted to has improved substantially since Mr.
Mangone departed, and continues to improve.   The situation with the 
Cape Code area real estate is being unwound and resolved.  DCU is 
aggressively attempting to mitigate its damage in this regard, and I 
suspect additional monies will be recovered in the future.

In short, DCU is doing very, very well.  In fact, the only real issue
I see is how should they handle the bonus dividend that their loyal
membershuip so richly deserves.  And yet, they are once again
taking deadly aim at their own feet with the notion that the membership
should pay fees for the most basic of services.  This is really broken.
DCU claims their competition are the area's full-service banks.  I say 
the only competition DCU has are the other banks that have branches
at Digital facilities :-) (and I would suspect that many of DCU's members 
have no idea what the heck "Baybanks" or "Shawmut" is...am I right Colorado 
and Georgia?).  DCU fails to realize the most basic of truths:
that the institution succeeds because it offers no-cost services to a
membership (not a customer base) that in many cases is "captive" (I mean,
DCU is 200 feet from my desk, and 4 miles from my house) and WANTS to
do business with them.  As long as DCU makes it convenient and cheap to
do business with them, the membership will continue to patronize them.

I certainly hope that when the issue of relationship banking, fees, 
or whatever you care to call it comes before the Board for a vote, they
have the good sense to do the voting in General Session so that the 
membership can see where their Directors stand on this issue.  It this 
turns out to be yet another "secret thing" sprung on us by our elected
officials, I'll be very disheartened.

Is anybody listening out there?

./chris

    I tell you what Chris, if they return a bonus dividend to members
    after they've implemented fees, they are returning money they have
    essentially overcharged you, and then to add insult to the injury,
    you'll have to pay taxes on it because it is a dividend!!!!!
    
    I wrote enquiring about relatonship banking, and just who decides
    policy in DCU.  I got a reply from Paul Kinzleman (who incidentally
    was the first reply and he's not even on DECnet!) and Phil Gransewicz
    very quickly and very detailed.  I also got essentially an
    acknowledgement from Tanya Dawkins.  I did not get a response from
    any of the other board members, in spite of the fact that I asked for
    their *personal* opinion.  I got, instead, a call from DCU
    communications.
    
    I wrote again, after seeing the proposed relationships ... which
    create many classes of members ...  One of the most distinct
    differences was those who were no longer able (likely through
    layoffs) to make direct deposit to DCU!  It doesn't matter if they 
    have regualr income ... just direct deposit!
    
    This time, I asked again for personal stances.  I got a response
    from Paul and Tanya ... I know quite clearly Phil's stance ... so
    I'm not concerned with silence from him.  But again I asked for
    personal input.  I did suggest to the directors that if they chose
    not to respond personally, that it was obvoius that they were
    choosing to let DCU policy be determined solely by DCU management,
    and not by the meeting of management and memberhip in the form of
    the board.  I also requested that they NOT bother to respond through
    Julie at DCU communications ... I'm sure she has better things to
    do!
    
    I get the impression that the majority of the board are basically
    place fillers designed to bow to management.  Look at the minutes
    of the meetings ... there are directors who seem to arrive late and
    or depart early from every meeting.  Clearly, these people do not
    seem to have the interests of the members at heart.
    
    Looks like it may be time to petition the board to show them that
    incentives to use DCU are more appropriate way to build reserves
    than with fees.
    
    One thought I had, with lots of people having $5 minimum membership
    accounts, this must be extremely expensive for the CU, given that
    they must mail out statements routinely.  What about increasing the
    minimum membership balance to say $25 or even $50.  This might tend
    to make members a little more committed to using the CU, while
    offsetting the costs just a little more
    

If it ain't broke, don't fix it.

Seems to me that the only thing that is broken is
management's communication with the consumers.

Collis

re: .90

I agree with what you are saying until...

>    One thought I had, with lots of people having $5 minimum membership
>    accounts, this must be extremely expensive for the CU, given that
>    they must mail out statements routinely.  What about increasing the
>    minimum membership balance to say $25 or even $50.  This might tend
>    to make members a little more committed to using the CU, while
>    offsetting the costs just a little more

You have to remember that there are a lot of us who CAN'T use DCU for much.
You are lucky because you have a branch right there where you work.  There
isn't a single branch in the whole state of Texas.  So, don't 'punish' me
for things beyond my control.

Bob

Bob,

>You have to remember that there are a lot of us who CAN'T use DCU for much.
>You are lucky because you have a branch right there where you work.  There
>isn't a single branch in the whole state of Texas.  So, don't 'punish' me
>for things beyond my control.

To be honest, right now, the nearest DCU branch has got to be over 6 hours
driving away!  If it wasn't for a need for a US bank account and US monetary
transactions, and the possibility of returning to CXO soon, I'd probably close 
my accounts there very quickly and reopen them at some time in the future if
I ever had the need.  For now DCU is useful, and I have more than $5 there!

I was just floating an idea ... but the question is, if DCU is so inconvenient
to your needs, why bother to have DCU accounts at all ?  If you maintain
only a $5 membership balance, then it is just a place holder, causing lots
of expense sending you a statement every month to tell you you've still
got $5 on deposit.  It is in part because of lots of low balance accounts
like these that fees are being considered.  The idea of a CU is members
helping members ... keeping simply a $5 balance is not helping anybody.
Having more than $5 in DCU is more likely to ensure that people actually
USE DCU .. and that is really what is needed ... get people to actively
use the CU to generate income ... not fees!

In making these thoughts, I'm just tossing up some ideas ... nothing
personal against anybody.

Stuart

    
    
    
    You know it's funny didn't that Henry Ford brochure come in the Sept.
    timeframe?   Why does history repeat itself?
    
    Wouldn't it be easier to sift through the accounts (by computer of
    course) and take those "dormant" accounts (that it appears they are
    trying to get rid of) and probe those people?  Banks have a policy of
    if an account is dormant for 7 years (I believe it's that long), then
    you are considered "delinquent" and they take over the account.  They
    try to contact you, but if there is no response, they assume that you
    no longer want the $$$..   I can see why a CU doesn't do this, but 
    perhaps the same results could be achieved if there is a prodding.
    
    I think we could all see if the CU was losing money the reason for this
    but when *we're making money*... Like others have said, where is it
    going to go?
    
    
    John
    

Re: Note: 623.89
Author: AOSG::GILLETT "But that trick never works!"

>I certainly hope that when the issue of relationship banking, fees, 
>or whatever you care to call it comes before the Board for a vote, they
>have the good sense to do the voting in General Session so that the 
>membership can see where their Directors stand on this issue.  It this 
>turns out to be yet another "secret thing" sprung on us by our elected
>officials, I'll be very disheartened.

>./chris

I'll be more than disheartened, I'll be royally PO'd. I spent my spare time
helping the RC board members get elected. I'll spend twice as much time
getting them ALL recalled if they pull a stunt like this (calling the 
'relationship banking' vote during Executive Session). 

Attention Board Members - those who helped put you there, we're watching.

Chris

    Folks, keep in mind that significant portions of the minutes posted
    here in notes have been redacted.  Assuming that fees may have become a
    "done deal" as detailed in such redactions I EXPECT that the respective
    redactions may become public so that we can see what took place and who
    voted for what.  IF this disclosure indicates that the Board did vote
    in fees, I will likely not support ANY candidate that voted the fees
    in.  This one issue may, in my opinion, disclose the true colors of
    existing Board members.
    
    Steve

    Please remember that there are only 2 rc members on the board ...
    their voice is only 2 out of 7 ... and even if 4 of the other
    5 are not listening to us, then our 2 rc members are not going
    to succeed in getting our message across.
    
    Stuart

>    Please remember that there are only 2 rc members on the board ...
    
    Four members of the board ran as Real Choices candidates.
    
    		Alfred

    I stand corrected, but the colour of the stripes seems to have
    changed.
    

    
    Re: .96
    
    > I will likely not support ANY candidate that voted the fees in.
    
    See you and raise you.  I won't "likely not support" I will work
    actively against any candidate that voted the fees in.  This is
    not a single issue item.  It is the very crux of the entire flap
    that arose two years ago.  This is OUR credit union and it WILL be
    run according to our needs and NOT the agenda of DCU management.
    If it takes another special meeting then so be it.
    
    Steve
    

I was one of those Real Choices people who worked on the recall
petitions and special meeting stuff.  I also ran (and lost) in 
the Special Election.

FYI, the individuals who affiliated themselves with "Real Choices" and 
won board seats are:

	Tanya Dawkins
	Lisa DeMauro Ross
	Phil Gransewicz
	Paul Kinzelman

Based on a 7 member board, with 4 Real Choices people (including
one at the helm of the ship), I find it inconceivable that the Board
could find either a simple majority or a 2/3 majority in favor of
imposing fees on the membership.

I still have all my Real Choices materials at home - including all the
flyers and posters we distributed articulating our positions, and all
the candidate statements from the Special Election (and several hundred
dollars worth of BoD minutes, Court documents, and a handful of receipts
from various lawyers for services rendered...nobody ever said being
an activist was cheap).  Perhaps it's time I dusted this stuff off and
reminded those Real Choices board members what they claimed to believe
when they ran for the board.

If they didn't believe in fees a couple years ago, I fail to see how
record earnings and a healthy, vigorous credit union could possibly
change their minds.

./chris

Let me see if I understand all of this;

    1)	There appears to be a problem in that there are many (#?) inactive
	accounts that are costing the DCU (Us!) money each month/quarter.
	These accounts are not generating revenue for the DCU so their
	associated administrative costs come from other revenue streams
	(Us again)

    2)	The board is discussing ways to reduce the number of instances of
	problem #1, or have them pay their way.

    3)  One current proposal is to introduce a fee structure.

I can see how #1 could be a problem.

I am also happy to hear that #2 is happening because that means the
Board is doing what they are supposed to be doing, protecting my interests
in DCU. The more they "save", the more I get in dividends. If they do not
try to improve this situation, they are effectively taking money from me
to subsidize inactive accounts.

So, the first question seems to be, do you agree that #1 is a problem?

If not, then the status quo seems to be the only solution for you.

If so, you are left with the problem of what to do about it. I have yet
to see anything which leads me to believe that the Board members would be
unwilling to listen to alternative proposals to the problem. As a positive
approach, I'd like to suggest that the discussions concentrate on the
problem and creative ways to resolve it. We might come up with something
acceptable to all.

I'd cast my vote for one of the earlier suggestions. Don't impose fee's, but
raise the limits on the balances required to earn interest/dividends.
This would reward those who maintain active "relationships" with the DCU,
provide them with a bigger pot to share since none would be going to the
inactive accounts, and lower the cost of maintaining the inactive accounts.

I also think changes could be made to lower the costs on the administrative
side. If the touch tone system were improved to include cash withdrawals
along with the checks cleared (in other words, always list the last 5
transactions regardless of type), I could live with a quarterly statement.

And don't mail statements to accounts which have had no activity during
that month/quarter.

But, gaining agreement from the full membership will never happen. For every
3 people who would be willing to go to a quarterly statement, there will be
one who is adamantly against it.  This type of scenario will always leave
the board (or any similar board) with few alternatives. They can do nothing,
thereby not upsetting the status quo. They can negociate a "least common
denominator" solution which minimally attacks the problem but doesn't overly
upset anyone. Or they can try to really make changes with the belief that
they are in the best interests of the vast majority and risk losing some of
the minority in the process. I hope the people we have are strong enough to
do the latter in all matters.

							Mark

re: .93

Stuart, I'm sorry that I didn't look at your node and see you were back in
Canada.  I was thinking you were still at CXO.

re: .103

Yes, I think it is time you remind everyone what the RC candidates said and
then we can all decide if there are more than 2 RC candidates still on the BoD.

re: whoever was talking about monthly statements

Those of us who only have our $5 in DCU get quarterly, not monthly statements.
I suspect that there is some law or NCUA regulation that requires that every
account get at least a quarterly statement, regardless of activity.  There is
something good about this.  It lets DCU know if the account owner has moved
while a Post Office forwarding order is still in effect, thus allowing DCU to
keep track of its members.

re: .104 and others

I get the impression that some of these people think that those of us who
have $5 accounts are trying to freeload off of DCU.  The idea of making
each account or transaction self-supporting is completely against the whole
credit union philosophy.  If you want that, buy stock in a for-profit bank.
It's not my fault that DCU has made it impossible or undesireable for me to
utilize more of its services.  One could say that those of us who don't have
access to a DCU branch are subsidising those who do.  After all, if we didn't
have all those branches to staff and run, our expenses would be lower and we
could issue a dividend to members.  I don't believe that is the proper way to
look at things.

Bob

Yeah .. fair enough Bob, I buy that the CU is there to service all members.
I don;t know the history of the CU, and its growth history, but one has
to wonder if it was really intended that it service members remotely, even 
to the extent it does.

Basically, from what I gather of my discussions with two of the Directors,
that there is concern over the resreves and providing for certain
contingencies that they see as possible.  So, management wants to increase
the reserves, and the only mechanism they see at this stage for some
reason is fees.  Somebody in management doesn't seem to understand the
precedent that setting fees would start.

So, I suggested to Paul that if management thinks we need these things
then it's time to give the membership hard numbers, and how quickly
they project need ing the numebrs and so on.  I also suggested to
Paul that we need to know what other ways there are of achieving
management's goals that have been considered.

Moreover, I wonder about how large those goals need to actually be (ie
the capital ratio) considering they were set in recession for recession, but
now the world is crawling it's way out of that recession.

This equation is a big one and there are a lot of bound parameters ...
what that leaves anybody to work with is very little ... but unless
DCU management discloses ALL the facts, then they will meet with bigtime
resistance.

Stuart

    Now we'll really find out if the new board is any different from the
    old board. I was one of the people that worked really hard to get 4
    "Real Choice" candidates elected to the current board. One of the
    planks the 7 real choice candidates stood on was "NO FEES". If one of
    the following happens I'll be leading the charge for another special
    meeting so that the DCU can hear from the membership again:
    
    	a) FEES are instituted and the board does not actively prevent them
    	   from being instituted.
    	b) There is a board vote and any RC board members vote for fees.
    
    Not to mention the fact that there is a binding resolution from the
    special meeting mandating no checking fees.
    
    I sincerely hope that it doesn't have to come to another special
    meeting and that the current board will listen to the membership and
    see sense in time. I just hope that this board don't have to be
    reminded, like the old one did, just who owns the DCU.
    
    Dave

    
    Re: .104
    
    >1)	There appears to be a problem in that there are many (#?) inactive
    >	accounts that are costing the DCU (Us!) money each month/quarter.
    >	These accounts are not generating revenue for the DCU so their
    >	associated administrative costs come from other revenue streams
    >	(Us again)

    The real point here is who has decided this is a problem?  I don't
    remember the DCU communicating with me and asking if I thought this
    situation was a problem so I doubt it was the membership.
    
    >2)	The board is discussing ways to reduce the number of instances of
    >	problem #1, or have them pay their way.

    Who has decided that they aren't paying their way?  Again I don't
    remember being asked.
    
    
    > I am also happy to hear that #2 is happening because that means the
    > Board is doing what they are supposed to be doing, protecting my
    > interests in DCU.
    
    Are they?  I don't remember the BoD asking me any questions about
    what I thought my interests in the DCU were.  How did they find out?
    
    > So, the first question seems to be, do you agree that #1 is a problem?

    Since you're asking, *no* I don't agree that it is a problem.
    
    > If not, then the status quo seems to be the only solution for you.

    Not necessarily,  I haven't heard any other proposals than fees.
    
    > I'd cast my vote for one of the earlier suggestions. Don't impose
    > fee's, but raise the limits on the balances required to earn
    > interest/dividends.
    
    Well there's an alternative.  I could consider this one so the status
    quo is the only option is it?
    
    You see, Mark, two years ago they told us about this "problem" and
    the special meeting overwhelmingly made it as crystal clear as could
    be that we weren't concerned about it.  We understood that some
    accounts would cost more than the income they generated, but that
    comes with the territory of being what we, the membership, understand
    a credit union to be.  At least the one that *we* own.
    
    Insisting on calling this a problem, when there is clear data from
    the customers that it isn't, can only lead me to the conclusion that
    the DCU is once again not concerned with its customers and bound and
    determined that it will have its way.  
    
    I don't think so.
    
    Steve
    
    

In a response I got yesterday from Paul Milbury ... he indicated to
me that he was in favour of fairness and against abuse of CU services.
That was as much as he was prepared to say directly ... he was referring
my letter to DCU communications again to answer ...

My response to him was "How do you define abuse of services apart from
outright fraud ?"  There is nothing in the membership criteria that says
youmust have an active account ... there is nothing that says you must
keep high or low balances.  There is obviously a feeling being conveyed
from somewhere (DCU management (viz Chuck Cockburn maybe ?)) that low
balances is abuse of services.

Effectively, by wanting to impose fees, or otherwise make up for the
loss on low balance accounts, they are in essence wanting to change the
rules of membership.  Clearly, this needs to be addressed by the members.

Therefore, I say to DCU ... we must be shown hard figures about what
is lost on typical low balane accounts across a reasonable range of
balances.  We must be shown what they expect the cash reserves to be in
hard numbers, and when they think we should achieve them.  We must be
shown that the reserves are clearly valid in an economy emerging from
depression, adn in a CU with significantly lower than average loan defaults.
Then, and only then are we in a position to evaluate whether the terms
of our membership should be changed.

Stuart

    
    Re: .109
    
    > he indicated to me that he was in favor of fairness and against
    > abuse of CU services.
    
    Oh I get.  People who don't have a "relationship" with the DCU
    are consciously choosing to "abuse" it.
    
    Again, I don't remember being asked what I thought was "fair" and
    whether I thought those with small account balances were credit
    union abusers.   My, how vigilant they are rooting out another of
    the many abuses we're afflicted with these days.  We really ought
    to go after those service abusers.
    
    Steve
    

re:  .104

It's not clear to me that the problem you identified in your bullet
#1 (that of inactive accounts costing the credit union money) accurately
describes the "problem" that DCU is trying to resolve.

The notion of relationship banking is predicated, by definition, on the
notion that some types of customers are undesirable while others are more
desirable.   By creating a structure that favors the more desirable
customers, you tend to discourage the undesirable ones.  The net result is
that you are supposed to attract more "desirable" customers while the
"undesirables" go away and bank elsewhere.

My claim is that because DCU is *very* worried about it's capital ratio
(too worried, IMHO), the "desirable" customer in terms of relationship
banking seems to be the high-dollar customer who will have relatively
large balances on an average daily basis.

DCU was clearly established to be a fringe benefit provided to Digital
employees and their families.   That they now seek in any way to 
discourage certain "classes" of members based on their abilities to EFT
large amounts of cash, or maintain large balances, or carry large
revolving credit card debt is unacceptable to me.   

I believe that DCU should see customers in the same light and provide
all of them the same services whether they are 6 figure salaried 
high-level management types with 5 figure RSVP accounts, or they are
a low level employee with a 3 figure RSVP balance.

In short, members are members are members, and all should be treated
the same way, and no member should be seen as "undesirable."

./chris

    
    DCU stands for Digital Employees Federal Credit Union.  Not People with
    Relationships to a Bank.  Relationship Banking to me, means that DCU is
    no long a credit union and is now a Bank.  As a Bank, "DCU" should have
    to pay taxes, because obviously they are making money and want more. 
    Therefore, if DCU chooses to progress on the "Relationship Banking" to
    institue fees, that they, in there own words, are a BANK and thus may
    lose their not-for-profit status.
    
    The only reason I have not used more of DCUs services is because they
    are *NOT* competitive.  I have a Gold MasterCard with USAA, because DCU
    would not qualify me for a Gold card and the interest has *MUCH* higher
    than USAA (last I checked my Gold MasterCard has a 12.5% interest
    rate).  I'm in the process of looking to refinance my home, but DCU is
    still not the better choice (they require points, I want to refinance
    for less than $100K, and the interest rate is not the lowest, Jeane
    d'Arc CU in Lowell has one of the better rates with zero points).
    
    As far as I'm concerned, DCU does not seem to want my business.  If
    they did, then they'd want more than a car loan from me (which was the
    best deal in town at the time and hence DCU got my business).
    
    ~Jon.

re:  .111 by AOSG::GILLETT 

Chris, I agree with what you've said and find this

>I believe that DCU should see customers in the same light and provide
>all of them the same services whether they are 6 figure salaried 
>high-level management types with 5 figure RSVP accounts, or they are
>a low level employee with a 3 figure RSVP balance.

particularly interesting based on my conversation with Chuck 
Cockburn.  He thinks the $100 minimum on an RSVP account is way
too low.  He said he doesn't know of anyone else (banks I assume) 
who has such a low limit.  I thought that was goodness and a plus 
for the DCU.  My impression of his opinion was that it was
badness.  I expect it to change based on my conversation with 
him.

Maryellen

    In regard to the inactive accounts, it probably costs us a lot of money
    to create, stuff and mail these account statements. I'd like to see
    that money used for re-attracting inactive members. Can we investigate
    if we can simply send a postcard to these inactive members on a
    quarterly basis which simply says:
    
    	You had no activity in your DCU account. If you require any
    	further information, please call 1-800-328-8797. 
    
    I'd like to know about how many inactive accounts we have. Is it
    10,000, 20,000 or higher? If we have 20,000 inactive accounts, saving
    $.25 on each quarterly mailing would save $20,000 for the year. This
    money could be used to lower interest rates and stir up more business.

The following was faxed to me from Jule Moran.  It is possible that I
screwed up on typing something in, so I will claim those errors... :-)

It seems like DCU is trying to cause people with CHECKING accounts to
get a relationship.  Saving accounts will not be affected, is my take of
what they said.

I hope this helps answer some questions.

	- mark

		Comparison of DCU. Relationship and Non-Relationship
			Households(as of March 31, 1993)

			 Total                  * Relationship            Non Relationship
			                        Households                Households

# of Households          67,716                   24,660                   43,056
% of Total               100.0%                   36.4%                    63.6%

Total Savings            $308,776,507            $287,115,413             $21,661,094
% of Total               100.0%                  93.0%                    7.0%
Ave HH Bal               $4,560                  $11,643                  $1,!44

Total Loans              $202,902,534            $191,570,499             $11,532,035
% of Total               100.0%                  94.3%                    5.7%
Ave HH Bal               $7,744                  $11,871                  $1,144

Total Profit             $4,783,836              $7,260,408		  -$2,476,572
Ave HH Profit            $71                     $294			  -$57

Services per HH		 2.348                    3.229                   1.845
Accts per HH		 3.225                    4.819                   2.314

* Houschoulds that maintain $3500 in total savings balances or Households that maintain $3500 in total loan balances or Households with a sold mortgage loan

					-16-




				DCU Checking Accounts
				as of March 31, 1993
				(amounts in thousands)

		Number of Accounts	Amount			Average   Profit

		Number    %of Total	Total	% of Total	Balance

Total		46,720    100.0%	$63,009 100.0%		$1,588	  -$1,469,782

Relationship	24,285     52.0%     	$56,873  90.3%		$2,958    -$267,849
Households

Non-Relationship 22,435	   48.0%        $6,137    9.7%		$300	  -$1,201,933
Households

					-17-




	Distribution of Non-Relationship Checking_ Accounts_by
		Minimum Balance for March. 1993



Minimum Balance		Accounts			Balance
		Number	% of Total Cum%     Amounts     %ofTotal   Cure %   Average

Less Than 1	5,465	24.35      24.35   -$40,586	-0.66       -0.66    -$7
$1 to $99	8,137	36.26      60.62    $228,152	 3.71        3.05     $28
$1O0 - $299	3,377	15.05      75.68    $621,328	10.I2       13.18     $183
$300- $499	1,639	 7.30      82.98    $642,679	10.47       23.65     $392
$500- $999	1,912	 8.52      91.50    $1,359,473	22.15       45.80     $711
$1,000 andAbove 1,905	 8.49      100.00   $3,325,562	54.19      100.00     $1,745

Totals         22,435  100.00      100.00   $6,136,608 100.00      100.00     $273


					- 18 -

    
    Re: .113
    
	> particularly interesting based on my conversation with Chuck 
	> Cockburn.  He thinks the $100 minimum on an RSVP account is way
	> too low.  He said he doesn't know of anyone else (banks I assume) 
	> who has such a low limit.  I thought that was goodness and a plus 
	> for the DCU.  My impression of his opinion was that it was
	> badness.  I expect it to change based on my conversation with him.
    
    "Too low" based on what standard?  I'd like to know.  I'd wager that
    it comes from a banking point-of-view meaning "we're leaving money
    on the table".  I agree the $100 minimum is goodness.  The more I hear
    the more it is clear that the crux of it all is that they simply do not
    get what we mean when we say the DCU *IS NOT* and *SHOULD NOT* be a bank.
    
    Anyone listen to the parting shot from the recorded message at DCU
    ATMs: "Thank you for BANKING with us."  Interesting...
    
    Steve
    
     

    re: .115
    
    Well after looking at the data it doesn't take a genius to figure 
    out why they want to institute fees without going to the membership
    for approval.  Non-relationship households out number relationship
    households nearly 2 to 1.  Also the data implies, to me at least,
    that the 24,000 relationship households are probably those with the
    highest income level.  The balance of the outstanding loans to that
    group and their level of savings is way above the non-relationship
    group.  So the more affluent are to be favored it seems.
    
    Steve
    

>    The only reason I have not used more of DCUs services is because they
>    are *NOT* competitive.  I have a Gold MasterCard with USAA, because DCU
>    would not qualify me for a Gold card and the interest has *MUCH* higher
>    than USAA (last I checked my Gold MasterCard has a 12.5% interest
>    rate).  I'm in the process of looking to refinance my home, but DCU is
>    still not the better choice (they require points, I want to refinance
>    for less than $100K, and the interest rate is not the lowest, Jeane
>    d'Arc CU in Lowell has one of the better rates with zero points).
>    
>    As far as I'm concerned, DCU does not seem to want my business.  If
>    they did, then they'd want more than a car loan from me (which was the
>    best deal in town at the time and hence DCU got my business).

The trouble is that there are basically five sides to this coin ...

	a) We want competetive or better dividends (interest) on our deposits
	b) We want no fees
	c) We want competetive or better loan rates
	d) We have to pay the operating costs of the CU
	e) We have to capital reserves to NCUA recommended levels


So the bottom line is that the loan returns to the CU must cover interest
on deposits and operating costs.

Yes, last year the CU increased capital reserves (ie made a profit), but
they say they have ot cover possible increased loan losses (in part as
a result of the high TFSO from Digital).

So, to get more competeteive loans, it means the funds have to come from
somewhere ... if we weren't increasing capital reserves just now, they could
come from the profits ...  But DCU management is saying to provide better
competetive loans and dividends, while building reserves, they must
charge fees.  They say the best way to charge fees "equitably" is through
some kind of "relationship" scheme.

Questions ...

Given that DCU cannot charge fees because teh membership says no ...

We have to take in more on deposit to increase the number of and dollar
value and hence income from loans.  How does DCU do this without lowering
the spread (ie paying higher interest rates on deposit) ?

Assuming that DCU has reached the required level of capital reserves,
how far would the current operating profit (given that this profit is
returned to members solely in the form of a loan interest rate reduction
and not increases in the deposit interest rates) go in lowering loan interest 
rates to make them more competetive?  Would it go a long way or only
scratch the surface ?  I don't know ?  Perhaps DCU can advise.

Or, the last option is to lower operating costs ... and DCU management
is saying that low balance savings and loan accounts cost DCU and their
plan for lowering these costs is to try to either get rid of them by charging 
fees or force them to maintain higher balances.  Are there other ways of
lowering operating costs without sacrificing service ?


I dislike fees ... I dislike intensely the proposed relationship banking
scheme ... If fees can be justified to improve the competetive pie,
then they must be implemented in a manner which is applicable and
equitable to ALL members.


As it stands, it looks like it all boils down to DCU needing to justify
this insistence on increasing the capital reserves (sounds eqiuvalent
to governments' insistence on wrestling inflation to 0%).


I stand really divided here ... I see a big jigsaw, and I cannot see
how to put it together.

Stuart

re: 623.119 by ILUVNH::BADGER 

>    I don't have a problem with understanding how they should be more
>    competative.  Banks that give better margins have to have capital asset
>    ratio,  and
>    	o PAY for the physical space they occupy.  we get branch space free
>    	o pay dividens to stock holders
>        o have reserves for loan defaults.
>    
>    do banks have better managment techniques?

And, banks have to pay income taxes.  The DCU does not.  Seems to me
that the DCU should be able to do this WITHOUT hitting the members up
for more money.  Maybe it's just that I'm still annoyed that we, the
members, had to pay for the Mangone fraud albeit indirectly.  And now,
DCU management wants us to pay more. My question still is, for what? 
What will the increased revenue buy us, the members, the owners of the
credit union? 

And, if relationship accounts are more profitable, why is it that the
DCU has not looked into enticing those non-relationship people to do
more business with DCU?  I talked about this with Chuck C.  He's not
interested in that approach (my impression from my conversation).   
Makes me wonder what's really going on.

Maryellen

>What will the increased revenue buy us, the members, the owners of the
>credit union? 

	This is, IMHO, the key question. Credit unions are run for the benefit
	of the memebers. Isn't that the theory? So how do I as a member gain
	from this relationship concept?

			Alfred

>And, if relationship accounts are more profitable, why is it that the
>DCU has not looked into enticing those non-relationship people to do
>more business with DCU?  I talked about this with Chuck C.  He's not
>interested in that approach (my impression from my conversation).   
>Makes me wonder what's really going on.


It's easier to hit with a stick and the results are more predictable.

Stuart

    Isn't it part of the package to improve dividends and make loan
    rates more competetive ... at the expense of the less valuable
    accounts.
    
    So, what this boils down to is a take from the poor and give to the
    rich.  (Even for a loan ... to afford a bigger loan you must be
    technically richer ... and the bigger your loan, the more you
    benefit from lower interest rates.)
    
    Some relationship!
    
    Stuart

    
    Re: .119
    
    >And, if relationship accounts are more profitable, why is it that 
    >the DCU has not looked into enticing those non-relationship people
    >to do more business with DCU?  I talked about this with Chuck C. 
    >He's not interested in that approach (my impression from my
    >conversation).  Makes me wonder what's really going on.
    
    Me too.  Particularly when the non-relationship households comprise
    2/3 of the membership households.  If you were, for a moment, to
    think of the DCU as a bank then you could view this as an unsatisfied
    customer base that YOU ALREADY HAVE.  They already 'come through the
    doors' so you don't have to convince them to do that.  Attracting new
    business is *very* expensive.  A sale you get through a newly acquired
    customer costs you much more than the repeat business from an existing
    customer.  One of Deming's fundamental principles is that profits come
    from the repeat business of a loyal and satisfied customer base.
    
    Even if this 2/3 represents a less affluent part of the membership
    and they individually borrow less money, I simply cannot believe that
    as a group that they don't borrow lots more total dollars than do the
    relationship group just by virtue of their numbers.
    
    What Chuck *should* be doing instead of planning to charge them fees
    is asking himself "How do I get them to do their borrowing with the
    DCU".
    
    Steve
    

Another point of data:

The cost that DCU figures is based upon published costs from someone else, not
ACTUAL DCU costs.  I think the numbers are published from the feds.

If you went and asked DCU, what is the ACTUAL average cost for a checking
account, they could not answer that (at least when I asked, they could not).

By using government numbers, you will find that the 'published' savings most
likely will be less for DCU, IMO, providing DCU is run efficiently as it should
be.  We should be reducing the costs, not increasing the fees.

I think you will find that when you ask questions to DCU, you have to ask VERY
pointed questions or you will not find out the full facts.  They did not
volunteer fact that it was not DCU ACTUAL costs, but someones computed figures
until I kept asking how the costs were computed and based upon what two
numbers...

If the relationship bit goes into effect, I will have to go elsewhere.  I am
currently looked upon as having a relationship because of a car loan.  In the
next couple months it will go below their 'pre-calculated' figure of $3500 and
I will no longer have a relation and will join the majority of the members
(63.6% to be exact).

	- mark

  I am currently non-relational by their figures...  But DCU has paid me over
$100 so far this year in interest.  Somehow I think that they are being very
myopic in assuming that people will always stay with a balance that is
below their higher minimums...  

  So...  Who is going to write the recall petitions?  We need to do them
more carefully than last time learning lessons from the last meeting!

    This bit about calling shareholders "abusers" sickens me.  What a way
    to expand your market!  Classify someone as an "abuser" until they go
    into big debt.  Come on!  Who in their right mind is going to place big
    loans with DCU because they don't want to be called dirty names? 
    Better to entice with a carrot than a stick.  Name calling is how you
    REDUCE your market, not increase it.
    
    I keep reminding myself that this thing is apparently a "done deal"
    according to responses I've read here.  No way that this thing went 
    through without Board approval.  No way it could have passed if ALL 
    RC candidates had remained true to their promises, IMO.  It's not 
    that the "Real Choices" supporters let anybody down.  If anything, 
    some of the elected candidates let the RC supporters down and "forgot"
    what promises they made during the elections by running under the RC
    banner.
    
    Steve

re:  .126

It's not clear to me that we need to write a recall petition - yet.

What I think we need to begin with are several things:

	1.  Current directors should receive email from anybody who
            is concerned about relationship banking - without regard
            for what "side" you are on.  Everyone should write and
            offer their viewpoint.

	2.  If you voted for Board members who ran under the "Real
            Choices" banner, you should send email to those specific
            directors (Lisa, Paul, Phil, Tanya) and remind them that
            one of the basic principles of Real Choices was NO FEES
            ON BASIC SERVICES.  Remind them that you expect them to
            stand by the words they used to get elected.

	3.  Send mail (as in US Post Office mail) to Charles Cockburn,
            President of the DCU.  Express to him your sentiments 
            regarding relationship banking.

If things continue to deteriorate, we will have no choice but to 
start the process over (although I am not certain that an entire Board
recall will be necessary).  However, this type of activism cost us
a lot of money, time, and risk (in terms of employement and careers).  
Before we take those risks again, we should try the obvious things to
let the Board and DCU know that we're still not happy and that they're
still being watched.

./chris

From:	STAR::BUDA "Mark A Buda DTN 381-1969  27-Aug-1993 1151" 27-AUG-1993 12:00:17.05
To:	@A.DIS
CC:	BUDA
Subj:	Message from Shareholder of DCU to DCU BOD

 -----BEGIN PRIVACY-ENHANCED MESSAGE-----
    Boardmembers,
    	I want to let you know that I am deeply concerned with the
    direction that DCU is going with regards to fees.

    I feel we are forgetting our 'roots' and reason for being in place;
    to serve all shareholders of DCU.

    We seem to be falling into the current terminology race that the
    whole industry is in.  The word 'RELATIONSHIP' is the latest buzz
    word.  I think we are wasting time trying to figure out how to rid
    ourselves of members, rather than trying to convince them that DCU
    is an affordable, in fact 'BEST DEAL' around.  We should convince
    the members that DCU is where they should be serviced.

    We seem to be taking the attitude that by getting rid of the free
    loaders, we will make more money.  I think this may be true for the
    short term, but as anyone who has been around the service industry can
    attest, it is not good for the long term.

    FACT:  DCU currently considers *63.6%* of its members to be
    NON-relationship!  Something is wrong when over 2/3's of the
    membership is considered at risk...

    I suggest you review why DCU is in business.  DCU is to SERVE its
    membership - not a small subset who have the most money.  If DCU
    becomes smaller because a few people remove a large amount of money
    from it, then so be it.  DCU is built to serve ALL members, big or
    small.  Free services, better than normal rates of return (DCU has a
    ways to go), and cheaper loan rates (DCU has a ways to go) are the
    'HALLMARK' of a credit union.

    If we are creating fees because of our size, then it is better that
    we reduce our size to become like the majority of credit unions -
    responsive to the whole membership.

    I would appreciate a response from you as a boardmember, as you are
    my eyes, ears, and voice to DCU.  I want to hear why you feel fees
    are good and how it will help the majority membership.  If you have
    some facts/figures, please feel free to get them to me.  I am MORE
    than willing to analyze this data and come up with a decision, as I
    do daily for Digital.

    I would also like to offer you my services of feedback, if you need
    them.  I can be reached at DTN 381-1969.

    	Sincerely,
    	- mark
 -----END PRIVACY-ENHANCED MESSAGE-----

  RE .-128

  I don't agree...  The best time to get those petitions signed is right after
the members see the mail from DCU saying they are going to add fees.  You
will get more members to sign the petitions then.

    
    RE: .122
    
>And, if relationship accounts are more profitable, why is it that the
>DCU has not looked into enticing those non-relationship people to do
>more business with DCU?  I talked about this with Chuck C.  He's not
>interested in that approach (my impression from my conversation).   
    
    I think the last sentence hit upon the underlying problem.  If Chuck C,
    is not interested in getting the "non-relationship" members to do more
    business with DCU, start a relationship, then what her *REALLY* wants
    to do is get rid of these members, no ands, ifs or buts.  In the short
    term, this will make the reserves look great, but since 1/3 of the
    membership will remain, the expense of running DCU will fall upon a
    very few.  Each member will have to generate more "relationships" with
    DCU in order for DCU to be able to stay in business.  If DCU continues
    to increase fees, at some point, ALL the members will be gone and so
    will DCU.
    
    It seems to me that 2 things need to happen in order for the survival
    of DCU and DCUs intended benefits to its membership (which we have not
    had as long as I have been a member - 1986), is to:
    
    	1) Determine how the BOD voted, if they voted, with regard to the
    	   institution of fees.  Those individuals on the BOD, who voted
    	   against what they said to get elected, should be *IMMEDIATELY*
    	   removed.  I do not support anyone who failed to do as they
    	   promised.  This is a lie and an insult to me and the membership,
    	   who placed their trust in these individuals.
    
    	2) If Chuck C. is not willing to look at other alternatives, then
    	   he is being closed minded and *NOT* doing what is best for DCU
    	   and its owners/membership and should be dismissed from DCU.
    
    ~Jon.
    
    DCU owner!

    
    [from my detailed candidacy statement when running for the Board
    (December, 1991)]
    
    "I believe DCU's priorities must be re-evaluated. More services is not the 
    same as better service. DCU must strive to have better than competitive 
    rates on deposits and loans to members.  While it is essential that DCU 
    rebuild the equity it has lost over the last year, it is not necessary to
    build equity at a pace which will burden the membership with heavy fees. 
    DCU's net income in 1990 was $4 million, excluding losses on participation
    loans. DCU is a very profitable institution, without fees. I do not 
    believe the credit union's primary goal should be to maximize profit. 
    DCU "profit" is, after all, money which belongs to you."
    
   -----------------------------------------------------------------------
    
    
    [from my official write-up in the election booklet (February, 1992)]
    
    "I am:
     - opposed to checking fees."
   -----------------------------------------------------------------------
    
    
    [from my writeup in the June 1993 edition of Network available at all
    branches or by calling the DCU Info Center]
    
    "Last year was the most profitable year in DCU history with nearly $5
    million of net income.  What is just as important is the way in which
    it was achieved; through increased loans to the membership and not
    through a fee-based business approach.  I remain fully committed to
    this approach."
    
   -----------------------------------------------------------------------
    
    
    Rest assured, my position has not changed on this issue.
    
    (why does this conference always perk up when I'm out of town???)
    

Phil,

Can you answer the dying question... 

Has this already been voted on?  In exec session or regular?

You probably can't tell us yet how people voted if it has been voted on,
but it would be *VERY* interesting to know if this passed or not...


John

    
    RE: .133
    
    John, I cannot answer your questions at this time but please be patient.  
    

    
    Re:
    
>    John, I cannot answer your questions at this time but please be patient.  
    
    Wow. Well I can only read this one of three ways:
    
    1, Phil is getting befuddled in his old age and can't remember whether
       this was voted on or not.
    
    2, It was voted on in general session and the minutes haven't been
       posted yet.
    
    3, It was voted on in Executive Session.
    
    Now knowing Phil I see 1) being very unlikely. I also see it as being
    unlikely that it "hasn't" been voted on. Because if that was the case
    I'd have expected a straight "NO" from Phil. So that leaves 2) and 3).
    Both of which are pretty scary.
    
    I do so hope that the DCU and the BOD aren't trying to just try and
    slip something by the membership.
    
    Dave
    

FWIW:  This is the reply I expected... and I honestly don't believe that if it
was voted on that the margin of "victory" for taxes was anything other than 4-3
or 5-2.. whether or not we'll be allowed to see the results... who knows...

I would say that if we don't see the results, that those RC members that voted
against what they stood for before should seriously reconsider being members of
the board!

It's quite obvious to me that some just don't want to *listen* to the membership.
They *listen* to the propoganda that Mr Cockburn feeds them.   Maybe it isn't
the board we should recall......

John

    Re .135 
    
    
    There was an alternative that you missed ...
    
    Maybe they didn't get around to voting on it at all!  I'll bet the
    meeting was hot and heavy ... and judging by previous minutes, there
    seems to be somebody who has to leave early and things usually wind 
    up soon after.
    
    Stuart
    
    

    If there are actual cost (rather than gains that did not materialize)
    associated with my account(s) at DCU, then I cannot honestly say that I
    am unwilling to pay them.  Why should someone else pay my costs?
    Regardless of whether I fall into the 33% or the 66%.  
    
    But what are these costs?????
    
    The fixed costs - rent, utilities, payroll, etc - should be shared
    between all the members and therefore should be taken out before
    dividends are calculated.  
    
    But why shouldn't any per account costs be billed to the account? 
    These might include the *ACTUAL* cost of processing all the checks I
    write each month, the *ACTUAL* cost of my ATM transactions, perhaps
    some factored rate for any transactions involving a teller or even
    EasyTouch.  Add up what I ACTUALLY cost DCU and bill me.  So, on my
    quartly statement, my dividend would be reduced by my costs.
    
    If these are ACTUAL costs, then this is fair.  Also, the general
    dividend rate should should be increased since overall costs are now
    recovered.  Then households like mine, which probably write more checks
    each month than perhaps we really need to, have some insentive to
    reduce the cost and households which cause less cost to DCU get higher
    dividends.  **AND** dividends would not include fees paid but rather
    would be reduced by fees paid and so would not experience any tax
    stupidity.
    
    However, if this "cost" is not actual cost but, instead, is based on
    some national average or, worse yet, on the difference between actual
    and some theoretical income, then FORGET IT!  I'M OUTA HERE!
    
    I much prefer a free ride.  But I cannot honestly object to being asked
    to carrying my own weight.  But I will not carry some theoretical or
    otherwise contrived weight!

re:  .138


With DCU just having completed it's most successfull year ever in
terms of profit, and with DCU well on its way to another record year,
I find it inconceivable that anybody is being asked to pay fees for 
basic services.  I see absolutely nothing in the fundamentals which
makes the case for additional fees.  

The goal of DCU is *not* to make tremendous profits and hang on to 
them.  The goal of DCU is to provide low-cost services to its membership,
and to share in it's profits with its membership.  If DCU were profit
sharing with it's membership (which it isn't...), I'd be more than happy
knowing that my bonus dividend is a little smaller because we all didn't
have to pay fees.  

DCU is a cooperative:  We are all in this together to help each other
out.  I fail to see how the imposition of fees helps anyone.

./chris

    What if I tell you that it costs say $2.00 for every cheque you
    write, every deposit you make and every withdrawal you make.  Can
    you imagine paying for deposits ?  There are some banks that charge for
    deposits as well as withdrawals.
    
    Sure, you could get higher dividends because everybody is paying their
    own way, but I think you'll find that tax laws wouldn't allow a
    finincial institution to reduce fees with dividends on an individual
    basis and not charge you tax on those dividends.  So what they do is
    average the costs and lump them into operating costs, then reduce the
    dividends to cover those costs.  Then you don't pay tax on the
    dividends you don't see.
    
    Now DCU has suddenly decided that the average costs are not where
    they'd like to see the average ... they reckon that the average
    costs are only average for fewer than 1/3 of the membership.
    
    They want to move this average a) without clear justification ...
    sometimes it seems to be because of low balance accounts, other
    times it's to build capital reserves ... and b) in spite of clear
    requests by the membership to avoid fees.  Clearly they will create
    two classes of members ... the third who by sufficient wealth or
    sufficient potential for wealth (those with good size loans) who
    can avoid fees, and the 2/3 majority.
    
    There is something wrong with this intrinsic picture.
    
    

    Donning my moderator hat.
    
    I hve modified the title of this notes string from "Relationship
    Banking" to "Relationship Banking and Fees for Service". The reason
    I've done this is that the discussion has very much centered on fees in
    the last few 10s of replies so I wanted the title to better match the
    content of the discussion.
    
    Dave

re: .140

Hey Stuart...

Yup, in fact I *can* imagine paying for deposits.  I read a magazine
article recently that discussed all the Stupid Bank Tricks that some
institutions play on their customers.  Notable among them were:

	1.  Fee for checking the balance of an account

	2.  Fee for making a deposit

	3.  Fee for making a withdrawal

	4.  Fee for inactive accounts

	5.  Fee for getting a receipt

And the list went on and on.


Once you open the door on fees, it's really easy to get adicted
to the dope.  Once you get your customers/membership accustomed
to the idea of fees, then it becomes easy to pile on more and more.

Not that DCU would ever consider any of the above, but that some
institutions feel that they can charge for whatever they want is all
the more reason to strongly object to a fee structure of any kind.

./chris

    re: .139:
    
> re:  .138
> 
> With DCU just having completed it's most successfull year ever in
> terms of profit, and with DCU well on its way to another record year,
> I find it inconceivable that anybody is being asked to pay fees for 
> basic services.  I see absolutely nothing in the fundamentals which
> makes the case for additional fees.  
> 
> The goal of DCU is *not* to make tremendous profits and hang on to 
> them.  The goal of DCU is to provide low-cost services to its membership,
> and to share in it's profits with its membership.  If DCU were profit
> sharing with it's membership (which it isn't...), I'd be more than happy
> knowing that my bonus dividend is a little smaller because we all didn't
> have to pay fees.  
> 
> DCU is a cooperative:  We are all in this together to help each other
> out.  I fail to see how the imposition of fees helps anyone.

    Don't get me wrong.  I'm not in favor of fees.  Like I said, I much
    prefer the free ride.  But, I have to wonder, if there is a real
    per-transaction cost, is it really fair to make the guy who only has a
    few transactions each month pick up the tab for people like me who have
    write dozens of checks each month?
    
    and .140:
    
>     What if I tell you that it costs say $2.00 for every cheque you
>     write, every deposit you make and every withdrawal you make.  ...
    
    If that is really the cost then, yes, I guess I would pay it.  But, of
    course, I would also start shopping around to see if there isn't
    another institution which might be able to operate more efficiently.
    
    I am not defending fees in general.  And I hate the idea of minimum
    balances.  However, *IF* there must be fees, I would not mind paying
    the costs I cause as long as I am charged the *REAL* cost and not some
    ficticious cost based on a national average or how far they missed some
    mythical profit projection.
    
    But, hey, if all the members agree that we should all share all the
    costs, I am happy with that.  But, then... why does it cost me $1 to
    use my ATM card?  :-)

    It costs you $1.00 to use your ATM card at a non DCU ATM. This is
    a direct fee passed on from the network to DCU and is 100%
    identifiable to the use of your card, and only your card.
    
    When you use a DCU ATM, the costs aren't quite as definable ...
    
    It would seem that a lot of DCUs operating costs are apparently
    not fully defined in terms of cost per transaction, probably because
    many of the costs are overhead costs.
    
    If the CU requires additional income then management must look at
    other ways to generate that income other than fees.  Clearly fees are
    the thin edge of the wedge, and moreover, this relationship banking
    bit is not fair to the vast majority of members.
    
    One thought, is the number of members who receive their pay by direct
    deposit really so low as to create so few "relationships" ?   And
    why is direct deposit considered such a "good" thing that banks and
    CUs wave fees for having it ?  Is it significantly cheaper for DCU
    to process ?  (Judging by the lack of cost quantification for other
    operations, I suspect that they probably can't answer but are doing it 
    because other commercial establishments do the same thing.
    
    It makes this fees and relationship thing look just like a "me too"
    way to earn additional revenue.
    
    Hmmmmm
    
    Stuart

    You know, this issue of "fairness" doesn't make sense to me.  If
    I have a MasterCard that charges no fees and I keep my balance paid
    off, what do you think my reaction will be if MasterCard comes to me
    and says I have to start paying a fee because it's not "fair" that
    those who keep balances from month to month have to subsidize my
    activity?  I'd blow them off, of course.  
    
    More, if I *did* have a significant balance (unfortunately, this is
    reality) and was told that MasterCard was doing this to their customers
    who didn't carry balances month to month, I would seriously question 
    their ability to manage.  Why?  Because they would be chasing away 
    future potential business!  People who don't have MasterCards aren't
    going to use MasterCards.  Knowing that MasterCard had been making 
    money all this while would simply reinforce the position.  
    
    IMO, if DCU really wants "relationships" they need to think long term -- 
    realize that all those low-balance accounts are the future market and 
    that the relationships should be sacrosanct.  Planning for the future
    is not simply building up reserves for rainy days.  It is also
    cultivating your future markets through building long-term customer 
    loyalty so that you can *avoid* some rainy days.  
    
    I think DCU needs to build on the idea that all shareholders that are 
    treated well will tend to do business with DCU.  Shareholders getting 
    nickled and dimed here and there are going to go elsewhere and you can 
    kiss off future business with them.  Shareholders that are always getting 
    little bits of good news (free checking every month) will tend to be 
    loyal to DCU.  It's classic Machiavelianism.
    
    Steve

  RE .-1

  YES!!!  You want to be fresh in the members minds when they sign the 
petition!  Wait a month and you will loose signatures.

    
    Re: .143
    
    > But, I have to wonder, if there is a real per-transaction cost,
    > is it really fair to make the guy who only has a few transactions
    > each month pick up the tab for people like me who have write
    > dozens of checks each month?
    
    Fairness is *NOT* the issue here.  That is the excuse that is given
    for promoting this relationship crap!  The only issue here is how
    do the owners of the DCU want it to do business with them.  period.
    That's it.  Done.  If the majority of the membership wants no fees for
    basic service then that is *all* the DCY needS to know.  period. 
    Fairness is totally irrelevent in this context.  If this was a bank,
    and I didn't like how they operated then I'd take my business
    elsewhere.  Since I am one of the owners, however, and it seems that
    the thing *WE* own is not addressing our wishes that is a different
    matter.
    
    Steve

    
    Re: .146
    
    > O relationships are a done deal.
    
    We'll see about that, won't we.
    
    Steve
    

    
.146>  no director is allowed to talk about it.
    
    It certainly does seem that way.
    
    What is it about being elected a director that prohibits independence?
    I can see some amount of "hanging together", but they always seem to
    take it to an extreme. And after the last election, I am convinced that
    at least two directors are being coerced into this behavior?
    
    Why? How?
    
    --------------
    
    I still have a large amount of artwork from the last "witch hunt" on
    line. Shouldn't be much work at all to update it for the next battle...
    

The problem with Special Meetings is that the rules of the game are
unclearly defined, and largely controlled by the very agency which
regulates credit unions - the NCUA.

At the first Special Meeting, one of the board members got up twice
and tried to have the entire proceedings thrown out as "illegal."
While I suspect that his usage of the word "illegal" (as in "go to
jail, go directly to jail, do not pass go, do not collect any
Cape Cod real estate trusts") was incorrect, the point is that any 
actions we try to take with regards to restricting executive sessions,
making meeting minutes immediately available, etc. will likely be
turned back by the NCUA without regard for how the membership votes.

Don't misunderstand me please, Ed.  I think that your ideas in .146
are correct.  I'm just suggesting that the deck is stacked against us
as regards trying to change operational things like how board meetings
are conducted and the like.

As for recalling board members, it seems clear to me there is a correct
and proper way to do this.  We "lucked out" at the first Special Meeting - 
the board "agreed" to stand for election again.  I suspect that they
consented to this because some of them were tired of the crap and longed
to be away from it, and because the others felt they would win despite
what a small group of vocal witchhunters might do.  If we're going to
start the recall process again, it's important to understand what the
correct process is to insure that the entire procedure doesn't get 
tossed out by the NCUA (or by some Court) as being improper.

Lastly, I don't think that a recall is necessarily the only line of defense
that can be taken to insure member rights.  A recall petition and Special
Meeting is somewhat akin to nuclear weapons - they should be weapons of
last resort and taken up only after other means have been exhausted.  Before
we start this process, we should take steps to make it crystal clear the
Board and to DCU management that a fee structure is unacceptable, contrary
to what the membership told management it wanted at the first Special 
Meeting, and will not be tolerated - especially while DCU is enjoying
record earnings.  Send email to the Board members.  If you don't hear back
from them after a couple days, send some more email.  Write a letter to
Charles Cockburn, President of the DCU and express similar sentiments.  If
you voted for the Real Choices people presently on the Board, send them
special email and remind them of what they promised.

If they announce a fee structure, if the message from the membership is
disregarded, and if they seem unwilling to reconsider their position,
then I'll volunteer to work the petition-signing tables in the ZKO cafeteria.

./chris

    A few comments (sorry if they don't meet Phil's minimum posting
    length):
    
    After reading the DCU definition of relationship banking, I'm surprised
    that only 1/3 of households meet this criteria.  I would think that the
    direct deposit criteria alone would have meant that a large majority of
    households would have had a relationship already.
    
    People in here seem to be concentrating on only a couple of the
    relationship criteria -- large loan balances and large deposits.  There
    are other ways to establish a relationship that are outlined.  I think
    it's the folks who are only looking at these two criteria who are
    trying to set up a "class war".
    
    Sorry, Bob, but I can't see any reason whatsoever to keep $5 in an
    account just so I can call myself a member.  If I can't get any benefit
    from an institution I won't tie up even a dime of my money there.  (I
    lived in TX for 2 years and remained an active member/customer of DCU).
    
    As far as the competitiveness of DCU goes, I check the papers, talk to
    friends and relatives, and I still can't find this huge competitive
    disadvantage people in here keep talking about.
    
    There's no such thing as a free lunch.  A CU where everybody stands
    around the campfire, holding hands, singing Kumbyah and handing out
    money and services is not in my best interests.  I applaud Mr. Buda's
    efforts at getting some hard data.  I think we should continue trying
    to get the data so we can make an informed, rational decision, rather
    than an emotional one.

>    A few comments (sorry if they don't meet Phil's minimum posting
>    length):
    
	Egads Keith!  29 lines!!  Don't strain those fingers... 8-)
    
>    As far as the competitiveness of DCU goes, I check the papers, talk to
>    friends and relatives, and I still can't find this huge competitive
>    disadvantage people in here keep talking about.
    
    	Hmmm..  I can't find anybody in here talking about a "huge
    competitive disadvantage".
    
>    There's no such thing as a free lunch.  
    
    Got that right.  But are people who aren't getting interest on deposits
    below $1000 getting a "free" lunch?  Or people who charge $3000 a year
    on a DCU Visa card getting a "free" lunch?  Or small borrowers or small
    savers?  Please define "free lunch" and the group of diners partaking.
    
    >A CU where everybody stands
>    around the campfire, holding hands, singing Kumbyah and handing out
>    money and services is not in my best interests. 

    	Darn, consider it scratched from next month's meeting.  Now please
    describe a credit union that IS looking out for your best interests.
    

�    	Hmmm..  I can't find anybody in here talking about a "huge
�    competitive disadvantage".
    
    Try a little harder, Phil.  There are several instances in this topic
    alone of people saying they get better interest rates on both loans and
    savings at other institutions.
    
�    	Darn, consider it scratched from next month's meeting.  Now please
�    describe a credit union that IS looking out for your best interests.
    
    You'd probably just call it a (gasp) Bank, so I won't bother.

    
�    	Hmmm..  I can't find anybody in here talking about a "huge
�    competitive disadvantage".
>>>    
>>>    Try a little harder, Phil.  There are several instances in this topic
>>>    alone of people saying they get better interest rates on both loans and
>>>    savings at other institutions.
    
	Oops, my mistake.  I guess when I read that people find other rates
    	that are better someplace I just don't translate that into "huge
    	competitive disadvantage".  To me a "huge competitive disadvantage"
    	would be having to pay for our facilities, pay taxes, etc.
    
�    	Darn, consider it scratched from next month's meeting.  Now please
�    describe a credit union that IS looking out for your best interests.
>>>    
>>>    You'd probably just call it a (gasp) Bank, so I won't bother.

    	Try us Keith.  Otherwise readers might misconstrue your comment as
    poking fun of their idea of what the credit union should be while
    offering no other ideas.
    
    	But putting your two statements together would seem to indicate
    that you think a bank has your best interests in mind, or maybe more so
    than a credit union (dancing and singing aside of course).  Now I'm sure
    that's not what you're saying or trying to say so why not help us all
    out and spell it out?  Thanks in advance...
    

re: .153

Keith,

 >   Sorry, Bob, but I can't see any reason whatsoever to keep $5 in an
 >   account just so I can call myself a member.  If I can't get any benefit
 >   from an institution I won't tie up even a dime of my money there.  (I
 >   lived in TX for 2 years and remained an active member/customer of DCU).
 
It's simple.  DCU is a Digital employee benefit.  It's also one which I do have
some degree of control over.  As such, I want to maximize the benefit for other
employees and myself.  If someone is going to take the benefit away, it will
be Digital, not some DCU employee or unresponsive BoD member.

Bob

�    	But putting your two statements together would seem to indicate
�    that you think a bank has your best interests in mind, or maybe more so
�    than a credit union (dancing and singing aside of course).  Now I'm sure
�    that's not what you're saying or trying to say so why not help us all
�    out and spell it out?  Thanks in advance...
    
    When someone can explain to me what the differences between a bank and
    a CU are without all the warm and fuzzies, maybe I'll give it a shot. 
    There may have been a difference at one time, but the dividing line
    between the two is extremely blurry these days from what I can see.

In reality, the difference between a bank and a CU are really very slim ...

. the CU is over the long term "non-profit" where a bank is "for profit",
  a CU's profits being returned to the members in one of these ways ...
  a) no or low fees, b) higher interest on deposits, c) lower loan interest
  rates (b & c compared to the banking industry in general).  A bank's
  profits are returned to its shareholders, and therefore, interest
  paid on deposits will be as low as the market will bear, and the interest
  charged on loans will be as high as the comptetetive market will bear.
  A bank will charge fees to ensure a profit while maintaining a
  competetive spread.  A CU may charge fees to ensure that they can
  maintain a competetive spread ... they do not have to make a profit.

. a CU's customer base is limited to its membership base and as such the
  customer base is going to be relatively stable.

. in general terms, a CU should be able to provide more pesonalized service
  although this depends on many factors, but the ability to work with an
  individual rather than blindly apply policy should be easier with a
  CU.  DCU is improving here ... I have had first hand experience.

. a CU policies are determined by its member/customers through its BoD.  
  A bank's policies are determined by its shareholders through its BoD.
  The diffreence is that all the CU's members are its shareholders ...
  a bank may have significantly fewer ... many of whome may have no
  money on deposit at the bank they own, nor loans from it.  The only
  input we have to a bank is through customer pressure; the input to the CU
  is by customer pressure and through the BoD.

So, given that what do we expect of the CU to truly make those differences
... No fees ... good rates ...directors responsive to membership wishes ...
... personal service taking the individual into account.

Where has DCU fallen down in the past ... all of the above.  The CU is
improving on all these items, but they have a long way to go.  Clearly,
the CU cannot bow to every membership wish, but as a membership, it is
the directors duty to explain clearly and succinctly and justifiably
changes in policy ... like fees ... before they are implemented.  We have
not had clear justification on relationship bakning and fees ... We should
be given the opportunity to provide input on such major changes.  This is
part of belonging to a CU and not banking at a commercial bank.

Stuart

    OK Keith, I think Stuart did a very good job of explaining it, now
    please tell us what you think a credit union should be.
    
    Now in a very general, sort of philosophical vein...
    
    Credit unions will look and act like banks if the people at the helm
    consider it a bank or the owners allow them to consider it a bank. 
    That bank look and bank behavior I believe is rooted in a blind
    addiction to numbers with disregard for the intangibles, like what the
    members WANT.  If the membership wants free checking, and the cost of
    that free checking does not threaten the existence of the credit union,
    then I don't see a problem.  I believe any CU Board must resist the 
    temptation to squeeze the last penny out of the membership.  There are
    bigger and more important issues which affect the CU, the membership
    and the bottom line; such as growing the membership loan portfolio. 
    This is where any financial institution makes it or breaks it.  
    
    All of this comes down to priorities and philosophies of what a credit 
    union should be.  So I don't think a discussion of "fuzzies" is irrelevant
    or emotional.  After all, how many people do business someplace BECAUSE 
    they feel comfortable (warm & fuzzy?) doing business there?  You simply
    cannot remove this from the business equation IMO. 
    

    I would far rather deal with an organization that
    shows, in its customer realtions, that I am an important customer,
    even at a slight cost.  So, if loan and savings rates are only
    marginally worse for example at DCU, then I'll work with DCU iff
    DCU will work with me to satisfy unusual needs and the like.
    But if DCU wants to threaten me with fees for this and that, then
    there's no advantage.  Similarly, if they won't work with me on
    individual circumstances, there's no advantage.
    
    Fortunately, so far, DCU has been flexible enough to work with me
    in a couple of instances ... once where it clearly was not their
    problem, and another where it was due to their lack of familiarity
    with certain cheque type instruments.
    
    And, I don't also mind paying for the convenience of banking at
    a "local" institution ... (they aren't local at the moment for me,
    but they are fulfilling a need.)  On the other hand, I'm not willing
    to pay over the top through fees.
    
    Stuart

50+ replies since my last entry and it's only been a few days. Now,
where was I...

The point I had been trying to make in my entry is that there were
long discussions going on about fees, no fees, impeachments, special
meetings, recalls, etc., yet I had not seen any discussion about the
problem. There was a lot of focus on one possible solution yet I
didn't have the sense that there was any agreement that there
was a problem. And if so, what it was. I still don't think
it's quite there yet.

Thank you to whomever obtained some real data which has helped
to focus the discussion. The first question seems to be,
Do you believe that there is a problem in that 2/3rd's of 
the DCU membership seem to minimally use the system? 
                                                                  
The next question would be to understand why. And then investigate
what could be done about it. These discussions of fees are related
to the last step yet we don't understand the first ones.

I certainly think there is a problem. I think 2/3rd's of the
customer base being low volume indicates that the DCU should
do something to attract more business, increase their usage,
or ask them if they really want to continue to maintain their
accounts.

Many of these discussions also talk about the fact that there
is only 1/3 participation because the DCU isn't competitive.
Well this strikes me as a Catch-22. Until they can get more
activity, reduce the accounts which generate little money,
and/or improve the equity ratio, they don't have the cushion
of money to offer more competitive rates. We can't have it
all so a balance needs to be discussed.

					Mark

In talking to DCU people I think they will allow a 'relationship' to
occur in multiple ways:

 o Direct deposit of paycheck.  I think the feeling is that this will 
   cause the customer to use DCU as a primary CU...  I have nto been
   able to get enough information to share with everyone about how
   this is calculated.  I feel that they are doing this because many
   other banks do it - compitition...
 o Loans of large enough amount
 o Savings of a large enough amount
 o ???

	- mark 

    
    Re: .161
    
    > I would far rather deal with an organization that shows, in
    > its customer realtions, that I am an important customer, even
    > at a slight cost.
    
    I remember a poster that used to be around Digital offices perhaps
    8 or 10 years ago that showed the reasons why customers switch
    vendors.  The overwhelming reason for customers to leave take their
    business elsewhere had nothing to do with money, cost, etc.  It
    was simple: when they felt that they were not being valued and treated
    well they left in droves regardless of the financial issues.  That
    squares with how I see the world.  I don't bring my business to anyone
    whom I think does not respect me no matter how good the deal is.
    
    IMO the DCU, if it goes the path some of us fear it is, will find
    this out.
    
    Steve
    

    re .164 Exactamundo!
    
    re .162
    
>Do you believe that there is a problem in that 2/3rd's of 
>the DCU membership seem to minimally use the system? 
    
    This is inaccurate ... 2/3 of the DCU membership don't use the system
    as much as DCU management would like ... that doesn't mean that they
    minimally use their accounts ... that doesn't mean that all these
    accounts are not profitable (just not profitable enough for DCU 
    management liking)
    
    Is there anything in your DCU membership brochure that says how
    you should use the CU and how MUCH you should use it ?????  I don't
    think so.
    
>Many of these discussions also talk about the fact that there
>is only 1/3 participation because the DCU isn't competitive.
    
    Not quite ... there are discussions which indicate that some
    would use more of DCU if they were more competetive ... but that
    is not to say that these members are not already relationship
    members or a part of that 1/3.
    
>Well this strikes me as a Catch-22. Until they can get more
>activity, reduce the accounts which generate little money,
>and/or improve the equity ratio, they don't have the cushion
>of money to offer more competitive rates. We can't have it
>all so a balance needs to be discussed.
    
    To some extent, true ... but remember, the capital reserves are
    being increased at record rates of profit already ... loan approvals
    are apparently more generous now.  Granted that we cannot loan out
    money that isn't on deposit, so, surely the thing to do is to
    work at increasing balances, not reducing them ...
    
    Fees will reduce balances as people take all their business
    elsewhere.  So, how to encourage higher balances ... one
    suggestion is higher rates on higher balances and no interest
    on low balances (for deposits).
    
    Certainly maintaining $5 membership accounts is pointless... but then
    that was done by people when DCU found it difficult to re-open accounts
    at some later time.  Perhaps it is time to just simply remind members
    that low balance place holder accounts cost DCU and members money
    that could serve to make DCU more comptetive and see what happens.
    
    Again ... let's avoid the stick.
    
    Stuart
    
    

    re: .165
    
    Stuart,
    
    >Certainly maintaining $5 membership accounts is pointless... but then
    >that was done by people when DCU found it difficult to re-open accounts
    >at some later time.  Perhaps it is time to just simply remind members
    >that low balance place holder accounts cost DCU and members money
    >that could serve to make DCU more comptetive and see what happens.
    
    I disagree.  If I have to re-join DCU AND apply for a loan when I get
    my next car, why should I bother with DCU?  When I got my last car
    loan, the CU that issued it simply asked if anything had changed since
    I had applied for the previous car loan, ran a credit check, and
    approved the loan.  They will probably do the same the next time.  It
    will be difficult for DCU to compete with that, but I would like to
    give them the chance.
    
    Bob
    

One clue I stumbled upon today was that additional savings accounts
(what were [still are?] called "U-Name-It" accounts) will have to maintain
a minimum $100.00 balance in the future.  The future being "not until the
first of the year" - meaning 01-Jan-1994.  I was in a rush so I did not
inquire what the consequence of a balance below $100.00 meant.

I personally use a number of such "sub-accounts" to facilitate my
weekly/monthly budgeting.  For example, I have an "Electric" account
and "Phone" account, from which my monthly bills are paid from.  Most
of these accounts rarely exceed $100.00 but nearly always sum to at
least $400.00 at any given time of the month.

While normally my transfers of $ with these accounts happens via the
touch-tone system, and the deposits are done via payroll deposit, today
I did a few transactions through a teller at the LKG branch.  She made a
suggestion about my methodology and in the ensuing dialogue made the
comment that "soon you won't be able to do this anyway because you'll
need to have a $100.00 minimum in these accounts."  The conversation and
suggestions were all pleasant enough but it was a surprise.

Just thought this was very interesting...

Ray

This relationship stuff is a bunch of balogna... It very definitely goes
to the heart of the "C.U. vs. bank" debate.  If there are some people who
"cost" the CU, it is nothing more than a cost of operation.  One that is
more than made up by the other business the CU participates in.   This
setting up of "desirable" and "undersirable" accounts misses the point
of being a quality service provider.  Give good service/products, establish
repeat customers and your business will prosper.  You will "lose" money on
some customers, you will "make" lots of money on some, and most will just
keep you growing steadily - that is, "making" you enough money to keep the
business healthy.  To try to eliminate the "losers" sounds nice in theory
but is too idealistic and elitist to bring long-term prosperity to the CU.
 
Another aspect is the dynamic of a "relationship" over time - at some times,
I'm definitely netting the CU income, other times I may be seen as one who is
being "subsidized" because I don't have a "relationship".  When you look at my
relationship with the DCU over the past 10 years, they have made a LOT of money
because of my business with them.  If I happen to fall into a period of
"independence" (? not sure what to call it) and it means I have to pay for the
privilege of being able to "relate", then I'd call it greed and selfishness on
the part of the CU.  Today's "loser" should be encouraged to become
tomorrow's "winner", not resented and made to feel resentful.

Ray

> The point I had been trying to make in my entry is that there were
> long discussions going on about fees, no fees, impeachments, special
> meetings, recalls, etc., yet I had not seen any discussion about the
> problem. There was a lot of focus on one possible solution yet I
> didn't have the sense that there was any agreement that there
> was a problem. And if so, what it was. I still don't think
> it's quite there yet.

There is *no* problem.  DCU had record earnings last year - despite a
lackluster economy, increased layoffs at Digital, a sour New England
real estate market, and the residual effect of the Mangone fraud.  Despite
all this economic uncertainty, DCU made more last year than ever before.

So, when DCU says "there must be (fees, relationship banking, new framitz's
for the whatchacallits, etc)," I find myself asking "it ain't broke, so 
why are you fixing it?"

All indications, judging from the BoD minutes, are that DCU is not
seeing terrible effects from Digital's layoffs - at least not like they
expected.  DCU continues to have strong earnings, the capital ratio is
in good shape, the Mangone losses have all been written down, and things
are rolling.  My take on life is that if it wasn't for some perceived
need to have a relationship with all of us, things at DCU would be
just rosy.

Based on what I've seen in the numbers, and based on what DCU has said
through it's spokespeople to the membership, I can only conclude that 
record earnings is not enough - management wants more.  Why is this?
Does management have some list of target figures they want whatever
convenient means are available?  Is management evaluated solely on the
basis of earnings growth? 

./chris

    Why require minimum balances in sub accounts if a member already meets
    the relationship criteria.  I just opened a U-Name-It-Account to buy US
    Savings Bonds with since DEC payroll won't allow more than 1 co-owner. 
    The U-Name-It account was going to duplicate the Bond payroll deduction
    (except I'd have to buy the bonds myself -- at a bank).  Not it sounds
    as if I'll have to tie up $100 for this "service".

    re .166
    
    If it isn't pointless, it certainly is a costly way of maintaining
    a file for you if you are going to use DCU for a loan only once in
    a while.  It would actually be cheaper to allow zero balance with one
    statement a year, as a placeholder account.
    
    On $5 you get 3 cents interest per quarter. And 3 statements at
    approximately $1 per statement.  So, to hold $5, it costs DCU in
    real terms $12.12 per year to maintain that account.  Now, how often
    are you going to take out a new car loan ??????
    
    Again Bob, I'm not trying to get at you, but trying to find and point
    out why DCU management seem to want to level out the playing field
    by charging fees.
    
    So, to DCU ... is it possible to have $0 balance placeholder accounts
    or some other less costly way of maintaining membership other than
    a $5 minimum share balance ???
    
re .169
    
    Chris ...
    
    I wonder how many more of these place holder accounts there are now
    than there were a couple years ago ???  If so maybe that is a
    perceived problem ... as I mentioned above ... placeholder accounts
    are costly ... there must be a better way to reduce their cost.
    
    Stuart
    
    
    
    
    
    

re:  .171

I realize that certain types of accounts (placeholder accounts among them)
may be costly, but my argument is, in a nutshell:  who cares?

I don't mean to be flip, but it just doesn't matter to me that there are
some things like placeholder accounts that require expense to service and
don't produce a lot of bang for the buck.  The fact remains that despite
all this perceived "waste and expense" DCU is making money hand over fist.

Were it that DCU was in the midst of total financial failure, and that 
someone could prove that the reason for this failure was due to some
evil thing like inactive accounts, or placeholders, or whatever, then 
I might be more receptive as regards a fee structure.  But when DCU is
profitable, then I have a hard time accepting that these types of accounts
are causing problems.

Remember:  Profit is *not* the only motive for a credit union.  

./chris

Expect to see a memo from the board in the next 2-3 weeks.  It will
cover many of the things we have talked about.  That is the best I can
get for the time being.

My feeling is that the letter will be black and talk about cars... ;-}

	- mark

    I get the impression that DCU management's hunt for profits is based
    on any number of "what if" scenarios that may drain capital reserves,
    and thus limit the amount the CU is actually able to lend (at ANY
    interest rate).  Remember that if a CU doesn't increase capital reserves
    it may not be able to increase lending because of all the what if's
    
    Now the question still remains ... How big do our reserves have to be ?
    And how soon do we have to get them there?  The fact that the CU is
    making an operating profit is good but is it good enough for our
    depleted reserves ?  I suspect it probably is if you don't increase
    the number of "what if"s.  For some reason, I believe DCU management
    has a long list of "what if"s they want to account for ... such
    as an increase in the number of place holder accounts.  Note this
    was considered a problem a year ago by some members ... look at note
    600.
    
    I don't believe that placeholder accounts are a particular problem,
    unless the number is on the rise, because they are an indication of
    business going elsewhere ... and instead of trying to retrieve that
    business, the lost business is considered another "what if" to recover
    with reducing costs ... by imposing fees.
    
    This is so reminiscent of local bus services in many areas ...
    As more people got cars, fewer people rode the bus, but the costs
    of providing service stayed constant, so fares go up, so fewer
    take the bus ... so services get cut, so ridership falls because the
    bus no longer provides the needed service. Now local bus service
    is a shadow of what it once was as the cycle of service cuts, increased
    fares and declining ridership continues. Now so many people are so used
    to cars, they won't consider the bus except in emergency and complain
    bitterly that busses don't do the job.
    
    So ... 
    
    I agree with your comment of so what to a limited extent, but I wonder
    what DCU's what if's are and should we really be concerned about them.
    If we should be concerned, are there palatable alternatives to fees to
    reduce operating costs.
    
    How many people with place holder type accounts really will come back
    and use DCU more fully ?
    
    Stuart
    
    

�I realize that certain types of accounts (placeholder accounts among them)
�may be costly, but my argument is, in a nutshell:  who cares?
    
    If it helps keep interest rates on savings below 3%, I care.

Re: placeholder accounts etc.

Remember a few years back, when DCU had an account drive? Tellers got a bonus
for signing up new accounts, whether you needed one or not. I wonder if this
inactive account 'problem' is one of their own doing.


CdH

    Fact:
    
    DCU has over $100 million that it can't loan out now due to lack of
    demand.  Digital people are for the most part debt averse.  Salaries
    are also (for the most part) high enough to allow savings higher than
    average.
    
    The way it is:
    
    Adding fees will NOT change rates on savings or loans.  They are set to
    be competitive with our competition.  Lowering the loan rates below
    that would be giving profit away.  Raising savings rates would
    also be giving profits away as well as encourage people to bring their 
    savings to DCU which would LOWER our capital ratio.
    
    To my knowledge:
    
    There is no Board memo in the works concerning any of this.  Should
    there be one, expect a first; an opposing few of equal length.
    

Thanks Phil ... interesting info ... but I cannot fathom the paragraph
below ... 

>    Adding fees will NOT change rates on savings or loans.  They are set to
>    be competitive with our competition.  Lowering the loan rates below
>    that would be giving profit away.  Raising savings rates would
>    also be giving profits away as well as encourage people to bring their 
>    savings to DCU which would LOWER our capital ratio.

Excuse me ??? Giving profit away ??? What is DCU going to do with the profits?
or more to the point with the membership moneys that they've acquired?  If
there are profits, then it implies that either a) the interest paid on
savings is too low or b) the interest charged on loans is too high or both!
And just who are these moneys going to go to and more to the point WHEN
are they going to be returned to their rightful owners ... the membership!

So then just what are they going to do with the added revenue of fees ?????
Lower loan rates or increase investment rates ??? Obviously not!  Just where
is all this "profit" going to go ????????????

Stuart

	Phil,

	Are we making any money on this $100 million we can't loan? Is it
	more or less than we'd make if we lowered the interest rate enough
	to get more people to borrow more money? I haven't a clue as to the
	answers but I am wondering.

			Alfred

    RE: profit
    
    Where's the profit going?  We're keeping it.  I know no other way of
    putting it and refuse to dance around the question or talk about all
    the other services we're giving.
    
    
    RE: investments
    
    Yes, we are making money on it.  The weighted average return back a few
    months ago was 4.12%.  Lowering the rates would only affect price
    sensitive consumers in the market for a loan.  Many would have already
    gotten loans at the already low interest rates.  Price won't overcome
    fear of losing your job, etc.  
    

    
>         -< oh, yeah, how would adding fees make us more competitive? >-
    
    	Forgot to answer this one...
    
    	It's NOT a matter of making us more competitive.  It's a matter of
    not making us any LESS competitive.  In plain English, everybody else
    is doing it so we can too.
    
    Welcome to the cold truths of the situation.  Sorry you asked?
    

�    	It's NOT a matter of making us more competitive.  It's a matter of
�    not making us any LESS competitive.  In plain English, everybody else
�    is doing it so we can too.
    
    Isn't this one of the reasons the last BoD was voted out of office? 
    How can this happen with Real Choices directors holding a majority on
    the BoD?

>    Welcome to the cold truths of the situation.  Sorry you asked?
 
	Never. I voted for streight answers so I'm not about to complain
	when that's what I get. :-)

			Alfred

Macneal writes:
>    Isn't this one of the reasons the last BoD was voted out of office? 

Absolutely!

>    How can this happen with Real Choices directors holding a majority on
>    the BoD?

Kinda makes you wonder doesn't it.  Allegedly, there is a 4-3
majority on the BoD of "Real Choices" people.  

The "Real Choices" Board members are:

	Phil Gransewicz
	Paul Kinzelman
	Lisa Demauro Ross
	Tanya Dawkins

If you haven't done so yet, I'd suggest that you communicate with them
by email and inquire as to where they stand on their campaign pledges
to "hold the line on fees" and to prevent DCU from being turned into
a commercial bank.

I think I know where Phil stands on these issues.  Paul can't note anymore
because he left Digital, but his writing in this conference seems to make
his views clear.  I wonder where Lisa and Tanya stand on this issue?

./chris

>                 <<< SMAUG::USER$944:[NOTES$LIBRARY]DCU.NOTE;5 >>>
>                                     -< DCU >-
> ============================================================================
> Note 623.177        Relationship Banking and Fees for Service     177 of 184
> ASE003::GRANSEWICZ                       20 lines   7-SEP-1993 14:06:30.22
> --------------------------------------------------------------------------
>     Fact:
>     
>     DCU has over $100 million that it can't loan out now due to lack of
>     demand.  Digital people are for the most part debt averse.  Salaries
>     are also (for the most part) high enough to allow savings higher than
>     average.

Phil,

I beg to differ.

1. I had an old style home equity credit line at the DCU. The rate was
   set by the BOD.  Current rate at the time was 9.0%. The rate if
   it were prime + 1.5% would have been 7.5%.  I tried working with
   the DCU - no luck. So I took my business elsewhere.

2. Banks are now offerring home equity lines are PRIME + 1.0%. The
   rate is 0.5% lower than the DCU.

I contend that the DCU can't lend the money because the rates are just
competitive rather than "best in class".  Why can't the DCU lend home
equity loans at PRIME rather than prime + 1.5%?

My guess is that the loan business is extremely elastic. Borrowing
$10K is the same whether it's from the DCU or a bank.

Gim

    I think that Phil is to some extent correct in that Digital
    employees are a little more cautious ... especially today in
    these days of TFSO.
    
    Also, if DCU's loan rates are comparable to a bank, and you do most
    of your banking with DCU, why go to a bank?  Maybe because of the
    loan application process of the past ? Who knows ?  But it sure
    looks like DCU has money to lend, and yet won't lower rates to be
    favourable to members, and yet is making record profits and wants
    more ... not from loaning out more money ... but the easy way ...
    hit us with service fees.
    
    Stuart
    
    

Re: Note: 623.177

>    Adding fees will NOT change rates on savings or loans.  They are set to
>    be competitive with our competition.  Lowering the loan rates below
>    that would be giving profit away.  Raising savings rates would
>    also be giving profits away as well as encourage people to bring their 
>    savings to DCU which would LOWER our capital ratio.
 
Unfortunately, Phil, that sounds an awful lot like bankspeak to me. I appreciate
the fact that the solvency of the DCU is partly in your hands, and you are
somewhat legally liable for its performance. The membership who voted for
gave you this responsibility.

However, what takes priority, performance numbers (profit levels, capital
ratios, and the like) or the wishes of the membership? Why should a privately
owned credit union be so concerned about what banks in the area are doing? It
seems like peiorities are out of place.

If DCU lender services were BETTER than the 'competition', why wouldn't the
situation take care of itself? 

I must be missing something.

Thanks

Chris


    

    re .187
    
    I think that Phil is telling us here what board and management policy 
    is and NOT what his personal policy as a director is ... He has made
    his position of standing for what he campaigned for very clear most
    recently.
    
    How we make it clear to other directors elected under the real choices
    or any other banner is the problem.
    
    Stuart

    
    RE: .187 & .188
    
    Precisely, thanks Stuart.  I guess I need to be more careful when
    entering those explanations to make sure people understand that.  But I
    didn't think that reply would ever be misconstrued as *MY* opinion on
    the way things should be.  I don't want to serve on the board of a
    bank!
    

    
    RE: .182
    
    >Isn't this one of the reasons the last BoD was voted out of office? 
    
    Yes, among many others.
    
    >How can this happen with Real Choices directors holding a majority on
    >the BoD?
    
    Good question.  But "Real Choices" was a movement to get more people on
    the ballot, not just the hand-picked replacements.  Were you one of the
    people calling for letting everybody run under this banner???  If so,
    then how can you expect to get a large number of people who believe in
    a common philosophy?  There was *1* joint statement for the group, and
    that took much work.  I suggest you and others re-read individual
    candidate statements as well.  Each and every director is responsible
    for his or her own statements, positions and votes.
    

    RE: .185

>I beg to differ.
>
>1. I had an old style home equity credit line at the DCU. The rate was
>   set by the BOD.  Current rate at the time was 9.0%. The rate if
>   it were prime + 1.5% would have been 7.5%.  I tried working with
>   the DCU - no luck. So I took my business elsewhere.

    Gim, your old style home equity credit line is in the process of being
    phased out so DCU will not lower the rates to encourage usage.  Instead
    they would have converted it to one of their new home equity products. 
    Did they not offer to do this?

>2. Banks are now offerring home equity lines are PRIME + 1.0%. The
>   rate is 0.5% lower than the DCU.

    Which banks?  DCU monitors what it considers its competitors to be. 
    What are Shawmut, Fleet and Baybank rates?

>I contend that the DCU can't lend the money because the rates are just
>competitive rather than "best in class".  Why can't the DCU lend home
>equity loans at PRIME rather than prime + 1.5%?

    They are exactly what they have been targeted to be, competitive.  If
    we loaned at PRIME, we'd be 1% lower than the banks, right?  Not good.
    We'd be giving away potential profits of 1%.  (the previous statements
    are not the way *I* think it should be, but reflect current approach)  

>My guess is that the loan business is extremely elastic. Borrowing
>$10K is the same whether it's from the DCU or a bank.

    Yes, unless of course one wanted to differentiate themselves
    from the other!

    >>My guess is that the loan business is extremely elastic. Borrowing
>>$10K is the same whether it's from the DCU or a bank.
>
>    Yes, unless of course one wanted to differentiate themselves
>    from the other!

    So true. Frankly, the differentiator I'd like to see is service. A
    CU is of and for the members. It should never be easier to do business
    with a bank then with a CU. I'm not sure that's the case right now.
    Also I think that if it were real easy to do business with DCU people
    would gladly prefer to borrow from DCU than a bank at the same rates.

    			Alfred

    Note: The service I get at branches is so first rate that that alone
    would keep me dealing with DCU even if I left Digital. 

>     Gim, your old style home equity credit line is in the process of being
>     phased out so DCU will not lower the rates to encourage usage.  Instead
>     they would have converted it to one of their new home equity products. 
>     Did they not offer to do this?

They offerred but I would have to pay for an appraisal. Other banks
offered with no cost along with a "teaser" rate. 

> >2. Banks are now offerring home equity lines are PRIME + 1.0%. The
> >   rate is 0.5% lower than the DCU.
> 
>     Which banks?  DCU monitors what it considers its competitors to be. 
>     What are Shawmut, Fleet and Baybank rates?

Many banks are offering "teaser" rates such as 4.9% for first year
(Worcester County) or Prime + 0% for the first year.

Andover Bank is offering PRIME + 1.0% for home equity loans. For those
with no first mortgage, the rate is PRIME + 0%.  Their number
is 800-222-2238.  Co-workers are literal flocking to Andover.

By the way, most of the Andover Banks officiers are in their 30's.
Perhaps their agressive approach is due to their youth and lack of
preconception on how a bank "should" operate.

They also have a plan where ATM withdrawls are no charge - but you need
a large balance.


Gim





                      






> 
> >I contend that the DCU can't lend the money because the rates are just
> >competitive rather than "best in class".  Why can't the DCU lend home
> >equity loans at PRIME rather than prime + 1.5%?
> 
>     They are exactly what they have been targeted to be, competitive.  If
>     we loaned at PRIME, we'd be 1% lower than the banks, right?  Not good.
>     We'd be giving away potential profits of 1%.  (the previous statements
>     are not the way *I* think it should be, but reflect current approach)  
> 
> >My guess is that the loan business is extremely elastic. Borrowing
> >$10K is the same whether it's from the DCU or a bank.
> 
>     Yes, unless of course one wanted to differentiate themselves
>     from the other!
> 

Re: Note: 623.189


Thanks, Phil, for correcting my misconception that the 'DCU' view was your
view as a board member.

I guess we'll just have to wait until something can be said about the
'relationship banking' formula. 

Thanks

Chris

    

Well, it appears that my big question has been answered.  That 
is, given the record profits by DCU, what do they need the money 
from fees for?  After reading the July 27 Board minutes, it seems 
they need it so the DCU will exceed the budgeted income goals and 
the employees of DCU can get a bonus.  Wonderful.

Maryellen

    I'd rather know that they were well paid to give good friendly
    service rather than on some bonus scheme to prmpt them to gather
    more money for DCU coffers.  The part I *STILL* cannot understand
    is why DCU wants so much MONEY essentially for itself!
    
    Stuart

>Well, it appears that my big question has been answered.  That 
>is, given the record profits by DCU, what do they need the money 
>from fees for?  After reading the July 27 Board minutes, it seems 
>they need it so the DCU will exceed the budgeted income goals and 
>the employees of DCU can get a bonus.  Wonderful.

>Maryellen

Bingo.

I think this topic deserves a note of it's own. DCU employee bonuses .vs. a
best-in-class credit union.

I'm sick to my stomach.

Chris

>     Gim, your old style home equity credit line is in the process of being
>     phased out so DCU will not lower the rates to encourage usage.  Instead
>     they would have converted it to one of their new home equity products. 

Phil,

Why does the loan have to been converted? Why can't the DCU just
charge a lower rate?  Converting implies a lot of expense such as
attorney's fee's etc.

Why can't the BOD just set the rate at PRIME + 1.5% every month? Of
course, a BANKER would say - there are those who can't qualify
for a new credit line because equity isn't higher enough. Let's
sock it to those poor soles.

(My statement is NOT aimed at you. I appreciate all the work you're
doing.)

Gim

�Were you one of the
�    people calling for letting everybody run under this banner???  
    
    No.
    
�If so,
�    then how can you expect to get a large number of people who believe in
�    a common philosophy?  
    
    I don't understand the question.  I thought there were a large number
    of people who believed in a common philosphy, thus was born the Real
    Choices "party".  There may be some disagreements within the Democratic
    and Republican parties in government, but they all do back the party
    platform.  Are you saying this is not the case with the Real Choices
    people?

    
	RE: .199    
    
>    I don't understand the question.  I thought there were a large number
>    of people who believed in a common philosphy, thus was born the Real
>    Choices "party".  
    
    You obviously thought wrong.  There was no "party", merely a way of
    identifying non-hand-picked replacements.  There was one, and only one,
    document that contained the names of all the RC people.  That is the
    *ONLY* common document and is the only common statement.  You
    need to read individual candidate statements more closely in
    the future I guess.
    
    >There may be some disagreements within the Democratic
    >and Republican parties in government, but they all do back the party
    >platform.  
    
    HAHAHAHAHAHA!!!!   I'm sure Bill Clinton will be glad to hear this!
    Have you been incommunicado over the last 8 months??  Wait a minute,
    you're joking right?  Some more of that classic Macneal humor?  Thanks
    for brightening an otherwise rainy day.  
    
    >Are you saying this is not the case with the Real Choices people?
    
    Why don't you ask THEM?  I think I have already stated my views.
    
    
    
    And what are you doing back in this note after dodging the question of
    what you think a credit union should be?!  Why is this so difficult for
    you to answer???  Should I add more sugar? ;-)
    

    
    RE: Gim
    
    Right now there are several different types of home equity products
    still out there (for DCU).  Some of the older ones have features to
    them that are not the same as the current ones.  Management has decided
    that it wants to simply the product mix by making one home equity 
    product the attractive one and encourage DCU members to go with that
    one.
    
    What was the deal that DCU offered (rates, costs, etc.) vs. what you
    got elsewhere?  Let's get a side-by-side comparison.  I'm curious to
    see how we stacked up.
    

>     What was the deal that DCU offered (rates, costs, etc.) vs. what you
>     got elsewhere?  Let's get a side-by-side comparison.  I'm curious to
>     see how we stacked up.


                Andover Bank - Home Equity Loan
            
             Type 1          Type 2          Type 3          DCU
            
            
Rate        
------      
1st Yr       Prime +   0%    Prime + 1.0%    Prime +  0%     Prime + 1.5%
Yr 2-n       Prime + 1.5%    Prime + 1.0%    Prime +  0%     Prime + 1.5%
            
Equity      
Req'd        up to 70%       up to 70%       up to 70%
            
Max         
Amount       100k            100K            100K
            
Fees?        None            None            None
            
Restrictions				     No first
					     mortgage



According to Andover, Type 2 was the most popular followed by Type 3.  One
co-worker went with type 3.  I asked Mr.  Prindle about home equity loans
and he said that the DCU wasn't interested in making Type 3.  His response
that was no difference in credit risk between have a first mortgage and
not having one. His arguement was that the default rate of first mortgages
was the same as home equity loans. Obviously, Andover Bank disagrees.

It's clear that Andover, instead of simplifing the product set, is
segmenting the market and addressint the needs of each market
segment.

The same with Citibank.  They offer 4 types of VISA credit cards:

1.  Classic
2.  Gold
3.  Ford (get 5% rebate)
4.  Advantage (one FF mile for each dollar charged).

It is clear that the decade of the 90's will be one where consumers
will shop around for the best deal. Price/performance/customer service
will be key.

Gim

    re .199:  At the time of the "Real Choices" effort, there were some
    people who accused us of trying to take control of the credit union
    (and no, I'm not just referring to the old Board).  They refused to
    believe my and others' repeated statements that we were just trying to
    get some new blood onto the Board.  I guess they didn't believe that
    I solicited all of the nominees to encourage them to come to Real
    Choices events and answer the same four questions that the Real Choices
    people all answered.  They certainly never understood that Real Choices
    was simply the list of those folks who WOULD come to those meetings,
    who WOULD tell folks what they thought, and who (in the end, and after
    some heavy negotiation) agreed to one VERY short common statement.
    
    In short, there never was any REAL CHOICES conspiracy and it was
    **emphatically** never a party!  The recent Board votes offer clinching
    proof of this.  As far as I'm concerned, we should forget about Real
    Choices -- it ceased to have any meaning the day after the election.
    Judge every Board member based on their actions and promises, and
    though it's useful to note that some agreed to a short statement of
    common belief, that's no reason to judge the Board members who didn't
    by lower standards.  
    
    		Enjoy,
    		Larry

I would also take issue with the point about DCU being competitive.
Or that people are willing to pay a somewhat higher rate if
it is more convenient to do so.

The last three loans we have obtained have NOT been with DCU.
Both my wife and I do most, if not all of our "banking" with
the DCU. In all three cases, we went elsewhere because the
rates and/or fees were lower than DCU. Even though it was
less convenient to do so.

					Mark

    
    Maybe the question that needs to be answered is:
    
    			How should DCU set its rates?
    	

>    			How should DCU set its rates?
    	
Easy BEST IN CLASS !!!!

And the CLASS should not be just 3 NE banks.

    
    Re .205:
    
    DCU should set its rates to be competitive. Setting its rates to be
    as good or slightly better than its "competitors" is a good start.
    
    Now...
    
.190>    Which banks?  DCU monitors what it considers its competitors to be. 
.190>    What are Shawmut, Fleet and Baybank rates?
    
    Which among these is a credit union?
    
    Perhaps "competitive" is the wrong concept here. Perhaps "best in
    class" (although I have come to truly hate that term) is the better
    slant. "Competitive" implies that the contenders can fight for the
    attention of a customer, but in general credit unions deal with
    unique and restricted customer base, so "competitors" tend to include
    those institutions that can draw the attention of potential DCU
    members -- banks.
    
    However, it has been established that credit unions enjoy at least one
    advantage over banks, in the area of taxes; and in addition, DCU has
    at least indirect support from DEC in the form of facilities.
    Therefore, our "class" is not banks but credit unions. We should strive
    to be "best in class" anong credit unions, and with the advantage of
    credit unions over banks, that implies our rates should be better than
    banks.
    
    So:
    
    1) What credit unions do we compare ourselves against?
    
    2) Why is our goal to be "competitive" with banks, when it should
       be "best in class" among credit unions and therefore better than
       banks?

.190>>I contend that the DCU can't lend the money because the rates are just
.190>>competitive rather than "best in class".  Why can't the DCU lend home
.190>>equity loans at PRIME rather than prime + 1.5%?
.190>
.190>    They are exactly what they have been targeted to be, competitive.  If
.190>    we loaned at PRIME, we'd be 1% lower than the banks, right?  Not good.
.190>    We'd be giving away potential profits of 1%.  (the previous statements
.190>    are not the way *I* think it should be, but reflect current approach)  

    Elsewhere we were told that DCU has $100 million it can't loan out at
    prime+1. Is it's othere investment of this $100 million yielding better
    than prime, or prime+0.5, or even prime+0.75?
    

I'm in the class of DCU customers that "has" a relationship.  Fine.

However, my latest car loan, and my home mortgage refinance were both
done with other institutions.  Why?  Because the rates and fees
were lower.  By a LOT.  Period.

To get my business, DCU has to be "close enough" to what I can get
by shopping around to make it worth my while not to have to shop around.
On my mortgage, I was willing to go perhaps 1/4 percent to do that, but
NOT pay any points or application fee.  I couldn't do that with DCU, but
I COULD do it with the current holder of my mortgage (THAT should be
the impact of "relationship").

On the car loan (late 1991), DCU wasn't even close.  And, on top of that, 
the loan came with an "insurance" policy to cover me in case I couldn't
pay it off due to death, disability, or even unemployment.  Sure, the
price of the policy was built into the cost of the loan, but it STILL
beat DCU.

I'd like to point out that the profit to DCU on those two loans was
0 (ZERO) due to the policy of trying to "maximize" profit.

I ask you to consider which is in DCU's best interest (no pun intended :-),
getting 100% of the loan business at "lower" profit per loan, or getting
something less than 100% at "greater" profit per loan.  I'm not just
talking about running the business model to generate the "breakeven point",
I'm talking about EVERYTHING that's in the best interest of the DCU, many
aspects of which cannot be modeled in the spreadsheet.

On the savings side, it's too much hassle to move my money around everytime
I can get a few quarters of a percent more somewhere else, but I'd still
prefer to know I was getting the "best" rate, not just a "competitive" rate.
I feel that my business should be worth getting the *best* treatment from
MY credit union.  However, if the spread starts to get big enough, I will
sadly take my money elsewhere.

bruce

>                   <<< Note 623.177 by ASE003::GRANSEWICZ >>>
>
>    Fact:
>    
>    DCU has over $100 million that it can't loan out now due to lack of
>    demand.  Digital people are for the most part debt averse.  Salaries
>    are also (for the most part) high enough to allow savings higher than
>    average.
>    
>    The way it is:
>    
>    Adding fees will NOT change rates on savings or loans.  They are set to
>    be competitive with our competition.  Lowering the loan rates below
>    that would be giving profit away.  Raising savings rates would
>    also be giving profits away as well as encourage people to bring their 
>    savings to DCU which would LOWER our capital ratio.

"..lack of demand." Would there be demand for this money if the interest rates 
were lowered?

"Lowering the loan rates below that would be giving profit away." Giving it 
away to whom? The membership? I thought the DCU was formed for the benefit of 
the members? If the DCU can operate in such a manner as to offer loans to 
members at interest rates below the competition, why shouldn't that be done?

"Raising savings rates would also be giving profits away..." Same questions.
Phil, I simply don't understand this reasoning. (The capital ratio problem I 
do understand).

-stephen

    
>Phil, I simply don't understand this reasoning.
    
    Neither do I, Stephen...  Guess it depends on what you think a credit
    union should be and one's priorities.  I know what mine are and
    maximizing profit does not appear on the list.
    

Another point to ponder is the services DCU will now be charging for
where it did not in the past or was cheaper:

Please mention others that you can think of.  Once you see the change,
you will be amazed at how few things are free any more.

			 OLD	NEW
Money Orders		$0.50	???
Certified Check		 FREE	$3.00

These are off the top of my head.  There are others that are also
increasing...

I am finding that there are so many increases that I am being nickel and
dimed to death.


	- mark

>Certified Check		 FREE	$3.00

I got a certified check on 2-AUG and the fee was $3; so unless this particular
fee was instituted before then, nothing has changed.  "Bank" checks were
free, and I think they still are.

Copies of check fees and statement copy fees are the same as they were
in July (I know, 'cause I got a lot of each in July).

Re: .211

> 
>                          OLD    NEW
> Money Orders            $0.50   ???
> Certified Check          FREE   $3.00

In the really old, old days, the money order was free. And the penalty
for having less than $1,000 in the checking was that you earned less
interest but you got interest nontheless.

Gim

    I have receved a few responses now to my email to the BOD about
    relationships.  
    
    Noteably, Phil and Paul K were the first to respond and their responses
    matched my expectations based on what I've seen or heard of/from them
    in this notesfile. 
    
    I just received a response which strikes a nerve from another director.
    I guess I have to get permission to post mail I receive in a notesfile 
    so I won't.  I'll summarize.
    
    This director seems to think fees are ok because some members who are
    not "relationship members" use several subaccounts for budgeting
    purposes.  This director seems to think this is an abuse of the DCU's
    services and that a minority of the membership is guilty of these
    abuses at the expense of majority of the members.
    
    My response is this:  Why is this deemed "misuse"?  What is the REAL
    expense incured by such behaviour?  
    
    Unless it can be proved to me that this behavior is inordinantly
    expensive I will not accept the idea that this as an abuse and
    therefore can *NOT* agree that we should correct it.

RE: Note 623.214 by JEDI::CAUDILL

>    This director seems to think fees are ok because some members who are
>    not "relationship members" use several subaccounts for budgeting
>    purposes.  This director seems to think this is an abuse of the DCU's
>    services and that a minority of the membership is guilty of these
>    abuses at the expense of majority of the members.

I received the same response from him.  This seems to be a canned letter
that he is sending to everyone.  I have not responded - yet.

	- mark

    re: .214
    
    I have had a similar experience.  As to the arguments presented, I
    appreciate that the third BoD member responded to me and to others.
    The argument was rationally presented and makes a case for taking
    action.  I am thinking this out, but still feel that a strong
    case has not been made for why relationships with DCU should be 
    redefined.
    
    I have also been contacted by phone for more feedback.  I *appreciate*
    being contacted to discuss this by DCU!  Bravo!  Now, back to the
    issue ...  Part of the problem here goes beyond the financial impact.
    True, I will likely see no increase in what I pay and will likely not
    see any fee increase.  But, it is this threat of fees that bothers me. 
    It represents a fundamental change in my relationship with DCU.  That
    is,  when I joined DCU it was with the idea that I was actually a member 
    of something; a pool of people joining financial resources.  I had say
    and with it responsibility to act for the better of the DCU community.
    
    Now, this "relationship" is being redefined and I have no say in it.
    In crude, simple terms, if I pay DCU enough money, "we" can have a
    "relationship."  The fact that I have a $5 savings account and can be
    called a shareholder is simply a technicality.  Makes me feel ... 
    cheap, used, resentful.  Will I still respect myself in the morning?
    Ooops ... getting carried away.  Wait fellas, I still have more to
    type in ... hey, leggo o' my hair ...  ooof ...
    
    Steve
                  

What certain members of the Board fail to realize is that
what they call "abuse of services," many of us call "the cost
of doing business."

It was argued yesterday by a DCU employee that DCU is "losing
2-1/2 million a year" from various sorts of "abuse" like this.
Sorry, but it just doesn't seem like a "loss" to me.

./chris

Re: Note: 623.217

>It was argued yesterday by a DCU employee that DCU is "losing
>2-1/2 million a year" from various sorts of "abuse" like this.
>Sorry, but it just doesn't seem like a "loss" to me.

It's a 'loss' to the DCU employees if they don't recieve their bonuses.

CdH

    I am one of those members that uses subaccounts or suffixes as a means
    of budgeting.  These various suffixes were set up with the assistance
    of and recommendation from a DCU branch manager.  What is the big deal? 
    How is this type of set up more costly?
    
    I've been a member since I joined the company in July 1980.  How is
    what I've been doing for 13+ years, following the suggestion from an
    official of the DCU, all of a sudden become costly and abusive?
    
    I hate banks.  I love the service and convenience of the DCU.  What
    advantage will be gained by driving me to another institution?
    
    Marv
    

       <<< Note 623.217 by AOSG::GILLETT "But that trick never works!" >>>

>It was argued yesterday by a DCU employee that DCU is "losing
>2-1/2 million a year" from various sorts of "abuse" like this.

	It's kind of hard to determine the "loss" when the DCU
	is experiencing record profits.

	This sounds suspiciously like certain health insurance
	companies that only want your business if you remain
	healthy.


	In my opinion, 

	It is wrong to institute fees. particularly when the DCU is
	highly profitable.

	It is wrong to even discuss bonuses, particularly when the 
	criteria is performance to forecast (lowball the forecast
	and get a raise). Missing forecasts by any singnificant 
	percentage should be punished, not rewarded.

	It is wrong that no discussion concerning returning some of
	these profits back to the members, either as REDUCED fees or
	lower interest rates or higher returns, has taken place.

	We seem to have come full circle and are right back where
	we were when a whole bunch of us decided to sign petitions.
	So much for an active membership. I will terminate all of
	my remaining ties to the DCU as soon as possible. I no 
	longer care. Good luck to the rest of you.

Jim

    
    What I DON'T want to see happen is that any account which DCU is not
    making money on, termed "abuse of services".  This is short-sighted
    micromanagment in my book and will lead to long term damage to the
    credit union in terms of lost members and lost business worth FAR more
    than what was "abused".
    
    If there is "abuse of services", TRUE abuse, then it should be dealt
    with appropriately.  I have a problem with an approach that classifies
    HALF of the membership as second class members and subject to fees. 
    All because they didn't fit SOMEBODY'S idea of how much money they
    should have and how they should distribute it.  In my mind, it is
    clearly a re-definition of your entire business approach and NOT a
    valid method to address "abuse".
    
    It is my belief that DCU has one of the strongest membership bases
    around on which to build.  Work hard and establish yourself in the
    minds of the membership as THE PLACE to go for your financial needs. 
    EASY to do business with, BEST rates, FAST service.  Do this and the
    membership will be well served and the credit union will thrive.  But
    this will take work, because many have lost faith in the credit union
    from episodes such as we're going through now.  I say enough is enough. 
    Commit to being a credit union or change the name and stop trying to
    fool people.
    
    oh, oh...  that sounds like it came from a member and not a Director. 
    You're right, it did.  Now which way did the herd go?  There they
    are... running towards that light at the end of tunnel...  ;-(
    

I also got the canned letter from the third director.  I responded to it
and got a response signed by the director's secretary.

Hmmmmmmmmmmmmm.


Stuart

re: canned response...

I received my copy too.  At least it was a response.  And of course Paul K.
and Phil had previously responded with a personal reply that was in line
with my philosophy of the DCU being a credit union, not a bank.

re: contact from DCU administration...

I too was contacted.  I believe it was Julie Moran.  She was polite and
patient and a big improvement over whoever I had dealt with when the famous
"Choices" pamphlet came out.  That's the good part.  The down side is that
I felt she was mostly trying to support the management decision and convince
me that "fairness and equality" were what was best.  I made it as clear as
I could that I don't care if there are a few people who are being
"subsidized" - that is one thing that is a plus for the credit union, as
many others here have already articulated.  (I think Chris Gillet's and Phil's
latest entries reflect my thoughts).  I'd prefer 80% of possible profit with
a "kinder, gentler" DCU than 99.9% possible profit with "dictated 
relationships".

        I currently have a home equity loan that more than qualifies me as
    a relationship member. However, over a 6-8 year period I had a number
    of other loans with DCU. I bought a car, a computer, and did some minor
    home improvements with previous DCU loans. They're all paid off and
    have been for some time. Between loans I thought I had a relationship
    with DCU. I mean I had borrowed and paid off loans before and was
    likely to turn to DCU for future loans. In fact for years I didn't
    even think about going elsewhere for loans. That was *my* end of the 
    relationship.

    Now what happens to someone who pays off a loan? Or who after years of
    paying interest has their debt drop below some magic number? DCU drops
    them from being a good customer and starts charging fees? I'm sorry
    but this is clearly not fair and equitable. It is not my idea of a 
    mutually supportive relationship.

    Also from a business point of view it is clearly likely that these fees
    will reduce the membership base. A short term (dare I say short
    sighted) view is that this will save DCU money. On the other hand our
    customer base for loans is the membership. We'll never have loans out
    to everyone, especially with our goal of being only average
    competitive, so by reducing the membership we reduce the pool of
    potential borrowers. This doesn't strike me as being a good business
    practice.

    			Alfred

Alfred asks about account balances falling below some "magic"
level.

My understanding, based on conversations with DCU employees last week,
is that (not including the "sold mortgage" thing) if you stop "being
in relationship" you will become subject to the fee structure.  Being
in relationship is currently defined as having an average daily balance
of $3,500, or having $3,500 is debt with DCU.  After being out of
relationship for 60 days, DCU will send you a nice letter telling you
to fork it over or become subject to fees.  After 120 days of being
out of relationship you become subject to the fees.

Something that hasn't been discussed much is what the greater meaning
of the fee structure is in terms of DCU's business practices.  Consider
that it is no long necessary for DCU management to go to the Board of
Directors to request fee changes, increases, or decreases.  This power
has been placed in the hands of the president.   The power to change
or modify the definition of a "relationship" is in the hands of DCU
management - this could also be changed without the need to consult
the Board.  This is a fundamental shift in the manner in which DCU 
operates.  It is clearly more like a commercial bank and much less like
a financial cooperative.

I have run for the Board of Directors, first as a "Real Choices"
candidate, and most recently independently on a philosophy of maintaining
effective services, lowering costs, and profit sharing with the 
membership.  These things are key to insuring the success of a
"financial cooperative."  What does the word "cooperative" mean
to you?  To me, it means "we're all in this together, and only together
can we help each other out."  DCU has argued, per the discussion in the
"Dear Valued Member" letter, that "cooperative" means "everyone must
pull their own weight."  This is incongruous with the notion that we 
should pool our resources to help each other out.  

These two things:  the definition of a "financial cooperative" and the
structuring of DCU's business practices should be key issues over the
coming months.  I would encourage all of you to write to your directors
and ask them why they are turning over critical strategic decisions,
like the entire DCU business model, to management.  Isn't this simply
passing the buck?   You should also ask your directors what their
notion of a "cooperative" is.  I'll wager the answer is a lot different
from my definition or your own personal definition.

A term you'll hear from those in the industry for people who have
accounts that are not profitable on a per-account basis is "waste."
The goal of many "quality improvement" plans is to "eliminate waste."
So, when you hear talk from DCU management about focusing on quality
to reduce waste, consider what that in fact may truly mean.

Here are some interesting stats fyi:

	* DCU has over $100 million it can't loan out due to lack
          of demand.

	* DCU had record net income last year of over $5 million dollars

	* DCU is well on it's way to having another record year in 1993.

	* DCU's capital ratio stands at approximately 6% - the highest ever
          for this credit union 

	* 4 of the 7 current board members ran on a "no fees" platform.

	* The decision (per Dave Garrod's earlier postings) to impose
          fees was 5 to 2.

Rambling on....
./chris

>>  Being in relationship is currently defined as having an average daily 
>>balance of $3,500, or having $3,500 is debt with DCU.

Funny, I saw that definition, but is it universal?  I have over $10K in 
loans outstanding on my son's college loan, but I'm only "valued".  Sigh!

Bob

    RE:.225

    >	* The decision (per Dave Garrod's earlier postings) to impose
    >      fees was 5 to 2.

    	I had missed this and didn't know what the vote was.  In light of
    this isn't it time to recall 5 people on this board.  The members/owners
    did or so I thought they did make it clear at the last special meeting
    that they didn't want fees.

    Joe  

    
>Funny, I saw that definition, but is it universal?  I have over $10K in 
>loans outstanding on my son's college loan, but I'm only "valued".  Sigh!
    
    The letter to relationship members started off "Dear Valued Member." I
    don't know how the letter to non relationship members is addressed.
    
    		Alfred

    Even though I have a CRT loan (and have had various other loans in the
    past), a DCU Visa with an outstanding balance (sigh) and actively use
    each of my accounts/sub-accounts and have over $300 a week being direct
    deposited in DCU, I am not considered a relationship member - HOWEVER -
    my letter did start with "Dear Valued Member". Whew, that made me feel
    better. Since I did not receive the letter when 'relationship' members
    did, I was curious as to why I wasn't considered a 'relationship'
    member. When I finally received my letter this past Saturday, I found
    out why - even though I have over $300/wk direct deposited, it wasn't
    to the proper sub-accounts! Silly me. I set up my sub-accounts
    according to advice from a branch manager. I see the big picture now -
    this kind of advice was given out on purpose so that suckers like me
    would put their money in 'the wrong place' and have to pay fees so that
    DCU employees could participate in gainsharing! 8-{
    
    Gee, and I'm in the middle of refinancing with DCU (a story in itself) 
    and I am going to be getting a new car loan in the very near future. A
    couple of months ago, I would have gone to the DCU for the car loan.
    Now I believe I'll look at financial institutions that value me and my
    money with no fees for doing business with them.
    
    Now that I've gotten my 'valued member' letter, I'll also be composing
    a letter to the BOD members.

re Note 623.225 by AOSG::GILLETT:

> A term you'll hear from those in the industry for people who have
> accounts that are not profitable on a per-account basis is "waste."
> The goal of many "quality improvement" plans is to "eliminate waste."
> So, when you hear talk from DCU management about focusing on quality
> to reduce waste, consider what that in fact may truly mean.
  
        I'm reminded of how for so many years Digital (the computer
        company, not the credit union) actively avoided doing
        business with smaller customers for pretty much the same
        reasons.

        Well, we succeeded beyond our wildest expectations!

        Bob

North Middlesex Savings Bank is a small savings bank with two offices in
Middlesex County.  It has several relationship products which I've mentioned
before.  Basically, their relationship products get an interest bonus or
reduction if you have more than one product.

I was reminded of another unique product offering last night, their Easy-Does-It
savings account.  If you keep the minimum balance in the account from January 1
through September 30, you get a 20% dividend on the interest you have earned
during that time, in October.  They advertise it as a way to save for Holiday
shopping.

I was struck by this last night, because I had always thought interest bonuses
were for credit unions only.  Note, there is no fee if you fall below the
minimum balance, which I think is $1000.  But there is good incentive to move
savings to this account!

Elaine

>    The letter to relationship members started off "Dear Valued Member." I
>   don't know how the letter to non relationship members is addressed.
    
>   		Alfred
    
    	The letter begins the same way. At the bottom of page one is where
    the differences start, although I don't remember the wording. Page 2
    then either lists you as a relationship member or a valued member. My
    daughter got the "valued member" letter even though she's only 6, so
    it become a moot point. My 1 1/2 year old son got the relationship
    letter. Both have about the same amount in their accounts, I'm assuming
    DCU overlooked the ages because one has the UGM suffix and the other
    has the ITF suffix after their names.
    
    Keith 

    According to my letter, even though I won't pay any fees on my
    checking, I have not established "a relationship with the credit
    union."  Boy, that's news to me.  Guess the honeymoon is over.
    Of course, my next question is, if I have no relationship with the
    credit union, why should I continue to volunteer my time and efforts
    to serve the credit union?  Who in their right mind is going to do
    volunteer work for the benefit of a bank?  
    
    Steve

    I think people are getting a bit hung up on the term relationship.
    It would be best if the DCU found a different word for this. I think
    one can have a relationship with a CU without a current large deposit
    or loan outstanding.

>    credit union, why should I continue to volunteer my time and efforts
>    to serve the credit union?  

    So it will be there when you do need it for more then you use it now.
    That's a more or less selfish reason if a selfish reason is what you
    need. There is also the desire to help turn it into something you would
    prefer it to be. If you can't justify your work, leave it and let
    someone else do it.

    I grew up believing that service is its own reward. This is why
    I continue to serve a school my son graduated from even though I don't
    have any other kids to go through.

    			Alfred

    Hi, Alfred!
    
    I'm a great believer in doing volunteer work!  My point is that if DCU
    is really turning into a bank, as it appears to be doing through
    redefining "relationships" and going to fee-based banking, then my
    incentives for doing volunteer work for the DCU are attenuated.
    I am especially concerned that the current changes do not seem to
    return tangibles to shareholders.  It can be argued that the DCU will
    be more "secure," but shareholders may already regard the DCU as 
    secure.  If anything, shareholders may have concerns that DCU is 
    "too secure," which may be why DCU has a reputation for being difficult 
    and non-competitive when it comes to getting a loan.
    
    Another point, when I got my mortgage I specifically looked for an
    institution that I could have a REAL relationship with.  I wanted an
    institution that maintained its own mortgages and didn't sell them to 
    some stranger.  That's one reason that I did NOT get a mortgage with 
    DCU (not the only reason).   I knew DCU would sell it and I would be 
    faced with a relationship with a stranger.  
    
    Steve

    I can't see a note here where this has been asked.
    
    Please excuse me if this is a naive question but, why does the BoD 
    think it's necessary to institute fees?  Is the DCU losing money?
    
    My daughter's account is always below the $500 limit and if fees were
    introduced she would leave as the DCU isn't very convenient for her.  
    However, if she takes her $100 out of the DCU then I and my family 
    would close our accounts also and then we are talking a much larger 
    sum of money.  For me, the local bank around the corner at home is 
    much more convient than the DCU.  I spend a small fortune on ATM 
    fees every month just to get access to my money. 
    
    I joined the DCU back when we had very limited choices for paycheck
    direct deposit.  Now, that is no longer so, and the lack of fees is 
    about the only reason I and my family still belong to the DCU.  Change 
    that and we move our money closer to home.  

    	When did you folks get your letters telling you that you were
    	a relationship member or just a valued customer?  Did anyone
    	in Colorado get one yet?  What if you aren't either a relationship
    	or a valued customer?  What do they call you then?
    
    	I'm assuming that since I direct deposit my paycheck into my
    	checking account, I'll be counted among the relationship sheep.
    	Is that a correct assumption?
    
    	Over what period is the $3500 "average balance" calculated?
    
    	If I mistakenly threw out my "Dear Valued Customer" letter with
    	junk mail, how can I find out my credit union membership rank?

    
.237>    	...What if you aren't either a relationship
.237>    	or a valued customer?  What do they call you then?
    
    Pond scum?
    

    I think all the letters are to "valued" member. It's just that some
    of us have more value to the CU administration than others. :-)

    		Alfred

    re: .237 nope, just depositing into checking means that you won't pay a
    fee but that doesn't make you a relationship member. The only way you
    get to be relationship is to:
    
    1. Have $3500 in deposits or
    2. Have $3500 in debt on your DCU Visa or
    3. Have a sold DCU mortgage
    
    Other than that, you are an abuser, but if you direct deposit
    $500/month into checking, you don't have to pay checking fees - you're
    still an abuser, but you don't have to pay the fees.
    
    BTW: I just had an interesting conversation with the branch manager
    here at HLO. I asked her if she had gotten much feedback from the
    infamous ' dear valued member' mailing and she said not really. Only
    about 3 or 4 had closed their accounts. She said that she explained to
    several people that all they have to do to avoid the fees is to have
    $125/week direct deposited to their DCU account and they were happy.
    She then asked me what I thought and I told her that I thought it was
    wrong - that the idea of a credit union is to work as a cooperative and
    that the members/owners had already made their wishes known two years
    ago. She said that they have a different perspective on the other side
    of the counter. They see the abusers every Thursday, wasting their time
    cashing their paychecks with only $5.00 in their DCU account while they
    have $10,000 in Baybank. She said they want to get rid of these abusers
    so they can take care of the real customers. I told her that it would
    be better to entice them to get the 'abusers' to put the $10,000 into
    DCU instead - using the carrot instead of the stick. She said that
    that's what they're doing with the fees. I told her that it wasn't
    using a carrot - it was using the stick. She felt it was a good idea. I
    then reminded her that the member/owners had soundly rejected fees two
    years ago and got rid of the whole board in the process. She replied
    that the board was made up of those people and that 5 had voted for the
    fees and the new president came in and told them that they were doing
    it all wrong and to institute fees. I told her not to be surprised if 
    another special meeting was called. She said it wouldn't matter because
    they had already discussed this at the last manager's meeting and it
    was a done deal - no matter what. The president wanted it and the board
    voted it in.
    
    I found it an interesting conversation. Her perspective is that they
    don't want to waste their time and energy on the little customer and
    it's better to beat off the abusers with a stick than to try and entice
    them into expanding their business with DCU. I also thought it
    interesting that she clearly believed that these decisions were Chuck's
    to make and that we the members didn't know what we were doing. Sounds
    like she would love working in BayBank or Fleet.

    Oh, one more thing I just remembered: when I mentioned the fact that
    these fees come on the heels of a very successful year, the manager
    said that the fees weren't to raise money, they were to drive out the
    abusers. 

re: .240

That must be why the tellers in HLO sneer at me when I ask them to do a
transaction I cannot do at the ATM.  But I do have the relationship, just not in
the share 1 or share draft area.

It's the same story as before.  The employees listen to their management, who
can be very convincing.

Elaine

That burns me up .... absolutely burns me up ...

Not only does DCU turn away business by being non competetive, they want
to ensure that the business stays away too!

This is they call "Mind over matter banking" ... We don't mind because you
don't matter!

This attitude has got to stop ...  The president is clearly not creating
a CU with two levels of membership ... by the time he's done, it will be
one level ... those who can afford to bank with DCU!

Yes, people who cah their paycheques at DCU and then take the cash elsewhere
are taking advantage of DCU and to some extent that's OK, but it would be
far better to get their business at DCU than drive it away.

Something's got to give here ...

Stuart

    re: .242
    
    Aha! So I'm not the only one who feels the attitudes of most of the 
    tellers (2 out of 3) at HLO leave something to be desired. I've had
    more than one transaction where I couldn't even get the teller to say
    Hi. It's like doing business with the Night of the Living Dead! Oh sorry, 
    it's getting too close to Halloween! 8-)
    
    For a nice contrast - go to the SHR branch!

    
.240>  ... She said that she explained to
.240>  several people that all they have to do to avoid the fees is to have
.240>  $125/week direct deposited to their DCU account and they were happy.
    
    Then she made them happy by telling substantially less than the truth.
    
    Note 694.61 documents nine new fees and two existing fees that are
    waived for relationship members,
    
    Of thoes eleven fees, >>>>*** ONLY ONE ****<<<<, the checking account
    fee, is waived for non-relationship members who direct-deposit $500
    or more per month into their checking accounts.
    
    
    Does the different perspective on the other side of the counter include
    playing fast and loose with the facts?
    

�    re: .237 nope, just depositing into checking means that you won't pay a
�    fee but that doesn't make you a relationship member. 
    
    Are you sure?
    
    

    Heisenberg's Uncertainty Principle at work here  ...
    
    The more we look at this, the less certain we are about anything,
    except that maybe we don't like the new arrogant DCU!
    
    Stuart
    

    Re: .248
    
�    ...just depositing into checking means that you won't pay a
�    fee but that doesn't make you a relationship member. 
    
    This is correct, as far as I can tell.  I called DCU a couple of days
    ago and asked whether I'm a relationship member.  The answer: no. 
    However, because I direct deposit my whole paycheck to my checking
    account, I will not incur fees there.
    
    --Pat

    
.240>  re: .237 nope, just depositing into checking means that you won't pay a
.240>  fee but that doesn't make you a relationship member. The only way you
    
.248>  Are you sure?
    
    
    The following comes from the "Schedule of Fees and Services"
    distributed with the relationship backing announcement letter (see also
    note 694.61):
    

CHECKING ACCOUNT
------------------------------------------------------------
Monthly Fee                                         $ 4.00
  (Waived for relationship member*; or daily
   checking account balance of $500 or more; or
   Direct Deposit of $500 or more monthly; or age
   18 or younger, age 62 or loder.)

*A relationship member has $3,500 in combined
 household deposit account balances or $3,500 in
 combined outstanding loans or a sold DCU
 mortgage.

    
    
    From this, it is fairly clear that a $500/month direct deposit waives
    the checking account fee, but does *NOT* make one a relationship
    member.
    
    If anyone has a rational alternate interpretation of the new schedule,
    please post it here.
    

    
.241>  ... the manager
.241>  said that the fees weren't to raise money, they were to drive out the
.241>  abusers. 
    
    
    
    Contrast the statement above with the reason for new fees as expressed
    in the relationship banking announcement letter (see also note 694.60):
    
    
    
     An important part of our long-term strategy is to continuously improve
     our ability to provide competitive rates for our borrowers and savers.
     Our plans to accomplish this include:

      ...

      o  Implementing a pricing structure that ensures equitable charges
         for services.  Because DCU is a cooperative, we exist for the
         benefit of all members.  We have an obligation to ensure that all
         members are treated fairly and that one group does not subsidize
         another.

     To provide fair treatment to all members, we are restructuring our
     deposit accounts and implementing very low minimum balance
     requirements and service fees.

�                 -< Employee attitude doesn't lure members in >-
�
�re: .240
�
�That must be why the tellers in HLO sneer at me when I ask them to do a
�transaction I cannot do at the ATM. 
    
    My experience with the tellers in HLO is the exact opposite of this.

�    From this, it is fairly clear that a $500/month direct deposit waives
�    the checking account fee, but does *NOT* make one a relationship
�    member.
    
    It wasn't clear from that excerpt, but it was clear from the posting
    you referenced.  Relationship members have fees waived that people
    simply making direct deposit don't (e.g. auto transfers, VISA).

    I didn't want to get into a rathole here about the attitudes of the HLO
    tellers. One of them is very friendly and smiles and talks. I got one
    of the other two to smile yesterday so I take this as a positive sign.
    I have yet to get the third one to even acknowledge a thank you or
    howya doin but I'm generally an optimist so I feel there is hope there. 
    Like I said, that's not the topic of this topic and I'd rather it
    doesn't get sidetracked on that.

    I have a question. Why is DCU cashing paychecks for people who only
    have $5 in their account? If this is the problem, start a check cashing
    fee for these people. 
    
    I have to agree with the fees somewhat. If a person only has $5 in DCU,
    they cost us more in maintaining these accounts and sending out the
    requisite statements than DCU can earn to offset those costs. This
    makes the money they lend out more expensive just to cover these costs. 
    
    Am I missing something?

    Yup ... read this note in its entirity ... and some of the other notes
    in here.  Discover why people only have $5 in their account and are
    not doing their day to day banking with DCU.  Discover that we are
    making record profits and DCU management sees fit to keep this money
    in DCU coffers.  Discover that the amounts raised by fees do not
    even begin to touch, by DCU's own admission, the amount of profits
    that they believe they are losing.  Discover that they don't seem to
    care about getting business.  Discover that DCU could make bigger
    profits by being competetive, not just with GMA banks, but with
    other Credit Unions and other credit card issuers.  Discover that
    DCU management is proposing to distribute some of these record
    profits to employees as part of a "gainsharing" plan.
    
    Now ... tell me what the fees are really for ... tell me what DCU
    should really be doing.
    
    Anyway $5 placeholder Share 1 accounts don't appear to be subject to
    fees anyway !
    
    Stuart

    I have read this note string. I still think that people who aren't
    passing enought money through DCU should be charged for services.
    
    However, I also agree that maximizing profit is not necessarily a goal
    that gainsharing should benefit from. There must be other goals
    attained. This gainsharing should also include such tangibles as new
    accounts opened, new loans approved, etc. The DCU must learn to reduce
    rates to attract and keep new customers. What was our goal for
    profitability? DCU employees should be penalized if we make TOO MUCH
    money since this may be the result of excessive interest rates. If we
    are a cooperative, members should benefit. An example would be that if
    we hit our profit exceed goals by 20%, the interest rates charged
    during the next quarter should be reduced by 20%. 
    
    If we can use the fees from "non-cooperating" members to reduce the
    fees and interest rates charged for "cooperating" members, I'm for it.
    We should be the only place members look for loans and services.

re: .259

> I have read this note string. I still think that people who aren't
>    passing enought money through DCU should be charged for services.


At which time DCU will become just another bank.

    Possibly so. However, since this is supposed to be a cooperative and we
    have influence (do we?) in getting them in to set interest rates where
    it benefits us, it is more than "just another bank".

re: .261

No we don't and no it won't be more than just a bank.

If you really want to be *fair*, everybody should pay for their account
servicing.  To those who are fortunate to classify as "relationship" from
deposits, then the serrvicing costs should be negligible.  What you are
saying is that people who cannot afford to keep a high balance should pay
the account servicing fees of those who can.

If you wanted to be really fair, then you should be charged an account
servicing fee, plus a per cheque fee, so that way, those who write a
few cheques don't subsidize those who go through a chequebook a month!

Why don't we charge for making deposits, after all, they cost money too,
and those who make lots of small deposits must cost more than those who
make a single large deposit every month.

Where do you draw the line at fairness ?  I'll lay odds that some relation-
ship members cost DCU far more in servicing fees than a lot of the so-called
abusers.

There is something fundamentally wrong with charging fees under the guise of
*fairness* ... because in charging fees, you create unfairness.

Just because you have large sums on deposit means that DCU is paying you
a lot of interest, and the interest bears no relation to what it costs to
operate your account.  The cost of operating the account is not
dependent on the amount deposited, but rather, on the number of transactions.
By waiving fees for higher deposits, DCU is saying, we'll give you a little
extra interest, but we won't call it that.

Similarly with loans, the cost of operating your loan is not dependent on
the size of your loan.  Unless you pay off early, or you have a line of
credit or VISA, the cost of operation is fixed.  If DCU is waiving your
account fees, it is saying that it is lowering your interest rates sllightly.

Where is the fairness in all this?

Yes, large deposits do usually earn extra interest because you can offset
the extra cost of providing that interest against the longer term stability
of larger loans, which often are charged slightly lower interest rates for
the same reason.  The margin on large / long term deposits vs large / longer
term loans can be smaller because the servicing costs on these loans is
smaller.

You also get better loan rates because of credit stability.  The difference
in rates between secured vs unsecured loans for example is used to fund the
higher risk loans.

So, let's stop messing around with the peanuts and get on to the real issues.
These fees were supposed to bring in a little over 10% of the so called
cost of servicing abusers accounts.  The actual amounts in this equation
are a  little suspect, but even so this is not a big deal as far as DCU goes.
With a few real carrots instead of sticks, to get even half the so-called
abusers becoming relationship members, the fees drop to under 5% of the
costs.

These fees are not about fairness ... They are about membership control.  The
only requirement for membership has been based on employment with Digital or
DCU.  Now, the requirement for membership is the payment of fees, waived
for the saver or the indebted.

Stuart

    Ah, isn't America great! I love the First Amendment.
    
    I think we should start out with fees on totally inactive accounts.
    Move up from there over time. I agree there is a fairness issue which
    needs to be addressed. However, there is no free lunch. Personally, I
    am offended that I have to subsidize people who use DCU for convenience
    and not for their full banking activities. I use DCU for my checking
    and savings. I'll be applying for the 11.9% credit card to lower my
    cost of capital.
    
    I am not saying high balances are a criteria. I don't keep a high
    balance (from my perspective). But, it does cost us real money to send
    out statements for people with $100 or less in their accounts and don't
    have any activity for months. Since these people are members, DCU is
    obligated to treat them the same as me, which I think is wrong.

    
    
    But it costs real money to send out statements for EVERYBODY, whether
    they have $5, $100, $1000, or $1000000 in the bank.  You get interest
    paid to you proportional to the amount you have in the bank at n% per
    annum ... that is your reward for saving ...  Why should a free
    statement be included because you have a high balance ?  Somebody
    has to pay for your free statement, and when fees are implemented,
    low balance people will be contributing to it.
    
    Basically, you've got to say that certain things are a cost of doing
    business, and should be spread equally across all members.  It is
    currently spread across all members by non-competetive interest rates.
    
    Again I say that if you are going to apply fees, then everyone,
    regardless of balance should pay based on their usage.  For example
    if it costs $5.00 per month to mail out a statement, then charge that
    to everybody.  If it costs 25c per cheque processed then charge that
    to everybody.  I tell you, if I am a non-relationship member and I'm
    being charged for operating my account and another relationship member
    is emptying his chequebook full of cheques every month for free, then
    I'm going to be offended!
    
    Then the question is, what are you going to do with the money that
    you've collected as profits.  At the moment, it looks liek DCU is
    going to hoard them.  It doesn't look like we need much more in the
    way of profits.
    
    Stuart

    
    > I think we should start out with fees on totally inactive accounts.
    > Move up from there over time. I agree there is a fairness issue which
    > needs to be addressed. However, there is no free lunch. I 
    > am offended that I have to subsidize people who use DCU for convenience
    
    I don't think most of the membership wants the above.  I for sure know I
    don't.  I want a credit union, which to me means:
    
      o free banking.  Probably not the most/best/trendiest services, but
        a free place to put my $$$, no matter how much or little.
      o a chance to get loans easier than at a bank.
    
    You can get the highlighted at any bank.  I personally don't care if other
    members of *my* credit union include little Jimmy with a $100 account
    for paper-route savings or Mrs. Frugal who never applies for loans.
    
    I just want a simple, cheap place for money.
    
    Carrying the logic expressed above pretty much sums up what the DCU
    wants - that every single solitary member make the DCU money.  It ain't
    gonna happen, and DCU will shoot themselves in the foot for trying to
    make it happen.  Why?  Because only banks who offer TONS of services
    can get away with those kind of fees.  Does the DCU want the profits of
    a bank but not offer all its services?  Unbelievable.
    
    Where does it end?  Everybody banks differently.  DCU should be a haven
    for us to do that without fees.  
    
    And, be sure, when DCU gets rid of the first round of "abusers," a new
    round will come to light.  I can forsee the day when DCU decides to
    charge people who actually make the DCU money, but just not as much as
    another subset.  There will always members on the lowest rung of
    DCU-preference.  
    
    - Sean

    
    Given two people with a little money in their account, why 
    should the one with an innactive account be charged?  Isn't 
    that person cheaper?  The person who uses the DCU costs money
    each time he/she does something...
    
    BTW:  I am considering refinancing and will now not consider 
    DCU...  I don't trust anyone else more, but, I am angry at
    the DCU and will not refinance with the current management.
    
    Also, I see no reason to pay for ATM charges or to pay a yearly
    charge for my VISA, so, DCU will not get my business for either
    of these services.
    
    Amy
    Amy
    

    re: .266
    
    >And, be sure, when DCU gets rid of the first round of "abusers," a new
    >round will come to light.  I can forsee the day when DCU decides to
    >charge people who actually make the DCU money, but just not as much as
    >another subset.  There will always members on the lowest rung of
    >DCU-preference.  
    
    It's already happened.  I no longer have a DCU Visa card for that
    reason.  The last year I had my DCU Visa card, I paid DCU $400+ in
    interest and they collected interchange fees (transaction fees from
    merchants) on $2000+ of my purchases.  DCU definately made money on my
    account, but was greedy and wanted a $25 annual fee on top of the
    above.  Needless to say, I cancelled my account and started using the
    credit card issued by another credit union, that has no annual fee and
    lower interest rate, excusively.
    
    Bob
    

�    But it costs real money to send out statements for EVERYBODY, whether
�    they have $5, $100, $1000, or $1000000 in the bank.  You get interest
�    paid to you proportional to the amount you have in the bank at n% per
�    annum ... that is your reward for saving ...  Why should a free
�    statement be included because you have a high balance ?  
    
    Because DCU doesn't pay all possible interest.  They make money on the
    money that is deposited.  Only a portion gets returned to the
    depositor.  The rest is used to cover expenses, provide money to loan
    out, and record on the year end statement as a profit.

What I am trying to show here is that *fairness* is a moving target ...

that it is not simply enough to say that $n in the bank is a good
criterion for determining fairness.  The number of transactions, and their
type should be included in this equation ... and goodness knows what else
... how about the number of atm versus teller operations ... the number of
mail operations ... the numerb of calls to easy touch.

Stuart

    	re .270
    
    	You speak of a moving target.  I thought I was covered from
    	all the fees, and month after month it seems I find new places
    	that they still sneak them in.
    
    	I have direct deposit into the DCU.  My wife also has a 
    	checking account into which I was depositing $100/week.  
    	On the Feb statement I was charged $4 for it.  It turns
    	out that you have to have a min of $500/month deposited
    	into EVERY checking account, not just the primary one.
    	OK, so I reduced the $50/week going into her associated
    	savings accoutn to $25, and changed the $100 into the
    	checking account to $125, and they were happy with that.
    	No new money into the DCU, nothing different except on
    	paper.  Frustrating, but I can put up with it until the
    	3 G's can get in there and make a difference.
    
    	Well I just got my kids' statements for the first time
    	since the fees started.  (I only get quarterly statements
    	because there are no checking accounts I guess...)  I
    	thought members under 18 weren't getting charged fees.
    	They each have their own accounts (that weren't charged
    	fees) and an associated "member described" (I think that's
    	the term for it) account that is labeled COLLEGE on the
    	statements.  I put a small amount each week into the
    	accounts (4 kids.)  
    
    	They charged $2/month for each account!!!  Three months,
    	four kids.  The DCU has stolen $24 from my kids as far as
    	I am concerned.
    
    	Moving targets.  These accounts are not $100 or more.  I
    	suspect I'm going to have to close them if I can't get 
    	it fixed for me.

    This is interesting....

    I called the DCU misinformation line in December and specifically asked
    if my deposit of $125 a month to my wife's account would exempt it from
    the $4 fee and was told NO!

    So I closed her checking and my daughters account for this reason.


    But I do not plan to move it back because the bank is much more
    convenient for my daughter at school (branches here and there) and my
    wife's goes to saving where she immediately draws it out and uses cash
    instead of checks.  Less money for DCU....


    
        

It requires $125 a WEEK ($500 a month), not $125 a month
to exempt you from checking account fees.

Collis

It requires a $500 per month direct deposit into an account.

Transferring $500 a month is not enough if the words are to be
taken as written.  Whether automatic transfer is enough is any
one's guess.  Or, does it have to be drawn from Direct Deposited
salary ?

Who knows ?  Someone in DCU probably ...

Stuart

    	Re my posting of two days ago:
    
    	Kids (under 18) accounts are NOT fee-free when it comes to the
    	member-described accounts.  Min $100 necessary.
    
    	They will refund my kids' money to date, but will charge $2/month
    	starting in April.
    
    	I'm closing these out.

    
    Re:
    
>    	They will refund my kids' money to date, but will charge $2/month
>    	starting in April.

    A little presumptious of them I say. Not if the 3Gs are elected.
    
    Dave

    	April is NOW.  As much as I am rooting for you, I doubt you will be
    	able to change it by the end of the month.

    Re .-1
    
    You're probably right about the month, but the intent is there.
    
    Dave

    	I'll reopen the accounts once you guys get us straightened out.

Okay, so the checking account fees are dead.  Has anyone tried to re-open a
closed checking account?  I was wondering if they would make you get a new
checking account number (i.e. order new checks).

Elaine

I recently did that. I was required to get a new number and therefor 
new checks. 3rd party vendor check prices aren't too bad so I didn't mind.

hr

Right - DCU charges almost three times as much for an order of 200 checks
as do any of the well-advertised mail-order companies.

					Steve

RE: Note 623.282 by QUARK::LIONEL

>Right - DCU charges almost three times as much for an order of 200 checks
>as do any of the well-advertised mail-order companies.

When I had asked Chuckie about this, he said this is how DCU makes
money...  He could not be convinced this as gouging, but more as what
the market would bear...  I believe the charge for checks is outrageous. 
I have gone mail order and done a much better job.  I know I am not the
only one.

It would be smart for DCU to lower the prices and make a nominal amount
of money from the sales of checks, IMHO.

	- mark

Well, in this instance DCU is, again, acting like a commercial bank - the
rates are right up there ($12.50 or so for a box of 200 - I overheard this
while at DCU the other day, I don't have a DCU checking account) with the
"big boys".  Yeah, this is how they make their money too.  I've seen DCU's
staffers use FUD to discourage people from using mail-order check vendors,
even though in many cases they're the same companies which print checks for
DCU and banks.

I really don't care about this - anyone foolish enough to pay DCU's prices
for checks deserves to be shafted.

					Steve

I guess I don't read the right magazines, etc., 'cause I've never heard of
these mail-order check vendors.  Could someone post names/address/phone of
a few?

-Hal

RE:        <<< Note 623.285 by TAMRC::LAURENT "Hal Laurent @ COP" >>>

>>I guess I don't read the right magazines, etc., 'cause I've never heard of
>>these mail-order check vendors.  Could someone post names/address/phone of
>>a few?

     Well, one major vendor is Current, Inc., right here in Colorado Springs.
There are a few former DECies working there now (1-800-426-0822).

                                      Greg

re .-2

  I guess you don't read the Sunday newspaper.  We get at least two of these
cheap check offers each and every week.

Please consider continuing the discussion about outrageous check printing
charges in note 128.  If you look there, you'll also see references to the
Consumer notes file, which probably lists lots of places you can get less
expensive checks.

But it is interesting that the more things change, the more they stay the same!

Elaine

    RE .285
    
         Look in any of the 100's of coupons in a envelope that you
    probably throw away as soon as you get then. I ordered mine through one
    of the flyers in them. I was bored and started flipping through them
    and there was 2 for checks by mail and on or two for Adress stickers
    and other various little things like that. I think I paid something
    like $4.95 for 200 "DESIGNER" checks. Since I use Checkfree for most if
    not all of my bills these will probably last me 10 years.
    
    Vern

(I mailed off several of the 3rd party check printer offerings to Hal.)