SAN FRANCISCO (9/1/15)--Credit unions in the San Francisco Bay Area are taking steps to attract more members by introducing no-fee accounts, no-frills accounts, and other products, according to the San Francisco Business Times (Aug. 28).
Patelco CU, Redwood CU and Tech CU have reduced fees while banks continue to get rid of free checking accounts, said the Business Times.
Patelco CU, based in Pleasanton, last year eliminated or cut more than $800,000 total in three dozen fees, including photocopying and check-copying fees. As a result, its membership grew 3%. It also eliminated balance-transfer fees on credit cards.
Next month Patelco will debut a “no frills” credit card with a low interest rate and no annual fees. The card won’t offer airline miles or other rewards for using it for purchases. Price is a part of the credit union’s mission to help its members with financial well-being, and simplicity equals transparency, which in turn and earns trust, Patelco CEO Erin Mendez said in the article.
Patelco also earlier this year debuted its “reverse money market account,” which pays a higher interest on lower balance thresholds to reward small savers. The credit union pays 3% on the first 2,000, and the rate gradually drops to 0.20% as the balance goes over $100,000. It also revamped each member’s existing money market account to earn higher rates. The promotion is usually limited to new accounts deposited or at special rates for existing accounts.
Redwood CU’s rewards program for debit and credit cards, has contributed to membership growth, President/CEO Brett Martinez told the Business Times. The Santa Rosa-based credit union operates its own rewards program instead of outsourcing, so it can steer the program’s features and member service. The credit union also operates its own car dealership, which draws members who need a car, a loan and insurance. It sells about 100 cars a month.
San Jose-based Tech CU recently opened its first office in San Francisco near Twitter’s headquarter and is promoting unsecured loans to help members with rental deposits in the city’s expensive rental market. Tech CU CEO Todd Harris noted that success of online lenders such as Lending Club and Prosper Marketplace helped fuel the promotion.