Credit union cuts penalty fees
IN the interests of fairness to its 55,000 members, Community Credit Union BCU has taken a pro-active step to cut penalty fees.
With the need for a fairer approach to banking currently in the spotlight, BCU chief executive Lyndon Kingston said it was the responsibility of the financial institutions to regularly review fees.
“We are committed to providing BCU members with ‘fair-go’ banking,” Mr Kingston said.
“In line with this, instead of waiting for industry and consumer pressure to force a reduction, we have initiated a review of the fees BCU was charging its members.”
With the review ongoing, BCU has already put a stop to the automatic charging of penalty interest on loan arrears balances where a member has defaulted on their loan commitments.
“We recognise that loan arrears can be caused by events outside the control of members, such as loss of employment, partnership breakdown or relationship breakdown,” Mr Kingston said.
“In circumstances such as these, BCU will not charge the penalty rate, because it would be unfair to do so.
“This doesn’t mean BCU will never charge a penalty interest rate but it will now be a considered decision based on the facts of a specific situation as opposed to an automated system generated decision.”
Further, fees for member cheque dishonours, cheque stop payments and direct debit dishonours have been reduced from $33 to $15, as have fees charged for member cheque referrals and direct debit referrals.
Mr Kingston said BCU was making the changes to ensure fairer banking for members.