How
can I avoid the excessive withdrawal fee and the
monthly service charge on the savings and
checking account?
There are
actually several ways. The easiest is to
make sure that you always maintain at
least a $100.00 balance. As long as
you keep $100.00 in the account, you can make
unlimited in-office withdrawals. If,
however, you make more than 4 withdrawals per
quarter and
your balance drops below $100.00 (even if it's
only for a day)--you will automatically be
assessed the $5.00 withdrawal fee for each
additional withdrawal (over 4).
The second way is to use an ATM for your
withdrawals-- you get 4 in-office withdrawals
per quarter and 2 free ATM withdrawals per
month--that comes out to 10 free withdrawals per
quarter. If you need more than that--it
would be cheaper to use the ATM machine with the
$1.00 service charge than the $5.00 in-office
excessive withdrawal fee.
The third way to avoid the fees is through your
payroll deduction. If you find that
you have to consistently withdraw your payroll
deduction right after it was deposited--then it
might be to your advantage to reduce your
payroll deduction to an amount you can afford to
save. Once your balance builds up to the
$100.00--leave it there--and then you won't have
to worry about the excessive withdrawal fee.
Why do we charge this fee? A large group
of our members completely withdraw each payroll
deduction within a day or two after it is
deposited. This activity generates
additional expenses which the rest of the
membership would have to absorb (through higher
loan rates and/or lower savings rates). We
felt that it was more appropriate for the
expense to be covered by those who create
it--and that's why we decided to use the fee.
What's the difference between "Payroll Direct"
and regular "monthly" loan payments?
When
a loan is paid through regular monthly
payments--the loan portion of your payroll
deduction is first placed into your
savings account. Then, on the monthly due
date, the funds are transferred out of savings
and applied to the loan. Twice per year,
we have months with three (3) paydays.
Those extra paydays are left in savings and are
available for withdrawal. If you
prefer to have those extra savings
deposits--then regular payroll deduction is the
way to go.
If, however, you would prefer to have your
"equivalent month payment" reduced by almost 8%,
then Payroll Direct is definitely the
way to go. With payroll direct, you are making
26 payments per year (equivalent to 13 monthly
payments). Therefore, the amount taken out
per payday is less.
For
example, assume you borrow $10,000.00 for five
years at 7.5% to buy a new car. With
regular payroll deduction, your payment is
$200.44 per month (or $100.22 per payday).
With Payroll Direct, your payment is only $92.35
per payday (compared to $100.22) or almost 8%
less. So, if your objective is to keep you
monthly payment as low as possible, then payroll
direct is definitely the way to go.
What is the
difference between "payroll deduction" and
"direct deposit"?
Payroll deduction
is when you sign up to have a specific
amount taken out of each paycheck. It
is only a portion of your paycheck--not the
entire check. Your payroll deduction is then
distributed to one or more of your credit union
accounts. For example, you might split
your payroll deposit between loans, a Christmas
club, your spouse's or children's accounts,
vacation club, etc.
Direct deposit, on the other hand, is
when the balance of your paycheck is
automatically deposited into your checking or
savings account.
Payroll deduction and direct deposit are not
"either/or" options--you can have both--in fact,
most members do. They specify how much
they want distributed between their different
accounts (payroll deduction) and then have the
balance of their check directly deposited to
their credit union checking account.
For more information on our checking
accounts--go to our
checking
page.
What are
your loan requirements? How do I qualify
for a loan?
In order to apply
for a loan at the credit union, you must be a
member of the credit union with at least $5.00
in savings (or sign up for payroll deduction)
In order to be approved for a loan, you
must meet our lending criteria. We use a risk
based lending system which is used to
standardize our loan evaluation procedures to
ensure fairness to all members (see the Risk
Based Lending-Explained section on the
Signature Loan
page).
Let's be realistic about our loan procedures.
Although the risk based lending program allows
us to approve more loans than our "old"
method--we can't (and don't) approve all loan
requests. We have a responsibility to all our
member--to lend their savings wisely (i.e.-avoid
excessive loan losses). In order to limit
the credit union's losses from loan default--we
must deny loans to members that have a high
probability of defaulting on the repayment of
that loan. Although we would prefer to
approve every members loan requests--it's just
not realistic. Some of our members will
default on the repayment of their loans.
That's a fact of life. Our goal is
to limit those defaults to acceptable levels.
The borrowers who pose the greatest risk fall
into two main categories:
-
Borrowers who have had recent credit
problems (within the past 3 years) with
credit at other financial institutions
through seriously delinquent accounts (90
days or more) and/or have defaulted in the
repayment of the debt (collection accounts,
charge-offs, repossessions, etc.).
Repaying the loan through payroll deduction
cannot
over-ride the potential risk because payroll
deduction is not a guarantee of
repayment--employees do leave employment,
and when they do--the payroll deduction
ends.
-
Borrowers who have excessive debt and
have been classified (by the national loan
scoring system) as probable candidates for
bankruptcy. Bankruptcy (of people with
good credit) is a very real problem in this
nation--and it's growing rapidly. In
fact, it is now the single biggest risk to
financial institutions. Consumer
debt has mushroomed. Each year, the
number of bankruptcy filings sets a new
record--as it blasts through the previous
year's record. And this has been
happening during a period of full employment
and low interest rates. What's going
to happen when the next recession hits (and
it will)? It's a serious concern for
all financial institutions. Our research has
shown that the likelihood of bankruptcy
significantly jumps when the debt ratio
exceeds 45% (installment debt divided by
gross monthly income).
In
order to limit our risk of loan default from the
above statistically high risk borrowers, we have
a base policy that states: Any loan
applicant who has a serious delinquency 90 day
delinquency or worse (during the past 36 months)
will automatically be denied a loan.
Furthermore, any applicant who has a debt to
income ratio that is greater than 45% is also
considered as an excessive risk to the credit
union and their loan application will be
denied.
If your original request was denied--there
still is hope. Sometimes we are able
to re-evaluate loan requests when the member
provides additional collateral (through a
co-signer or other form of collateral). We
are often able to approve "borderline" loan
applicants who provide additional collateral.
We will do everything in our power to reduce the
risk associated with your loan request. But as
stated earlier--we have a responsibility to our
other members to act within responsible lending
guidelines.
Do you offer
"credit cards"?
We
do not have a credit card program, nor do
we plan to implement one in the near future--for
several reasons:
First of all, as you are probably aware--the
credit card market is saturated. Every
credit worthy member already has their fair
share of credit cards. And frankly,
we don't have the resources or membership base
to compete against the industry giants. We
would prefer to channel our available resources
into products that conform with our goal:
to offer our members the best possible service
at the best possible price. Right now
a credit card program would not conform with
that objective.
The second reason is that we don't feel that
it's a good time to enter this type of market.
As you are aware, consumer bankruptcy has
skyrocketed--and this is the "good times".
Just imagine what's going to happen to
bankruptcy filings if the stock market takes a
nasty downturn (which it will) or we enter the
next recession (which is coming)? What
market do you think is going to get hit the
hardest? The credit card market--right.
Credit card default could put a number of
institutions out of business--we don't plan on
being on of them. We'll sit this one out
until after the smoke clears.
We
do have a "work around" though. If you
have your checking account with us, you can
qualify for up to a $2000.00 line of credit--at
rates that are probably much lower than what you
are currently paying. When you need funds,
you either:
-
Using Checks: write a check
and the funds are automatically transferred
(to cover the exact amount of the check) or
-
Using your Debit Card: first
make an advance transfer (from the loan to
your checking) and then use your debit card
to make the purchases.
Where else can I make deposits to my account?
You
may make deposits at any of our branch offices:
Albany Medical Center; Ellis Hospital; and/or
St, Peter's Hospital during normal business
hours.
If you have an ATM card, you may also make
deposits at Price Chopper.
Please note that there is a 2-day hold on all
ATM deposits.
What makes a credit union
different than a bank?
The
biggest difference is in who we serve.
Credit unions are non-profit corporations that
are owned and operated by their members
and serve only their members.
Banks, however, are owned by their
stockholders
and that is who must be served-- first.
What is it that stockholders want? Higher
stock prices through bigger profits--right! And
how does the bank make those profits? By
charging their bank customers (not stockholders)
higher fees and higher loan rates coupled with
lower savings rates. By their very nature,
bank's must satisfy the desires of the
stockholders or die--regardless of what that
means to their customers.
Credit unions, on the other hand, serve only
their members. What do owner/members want?
Lower loan rates, higher savings rates, and
personalized service. You are our
owners. If we're going to survive and
prosper--it is your needs that must be met--not
some outside investor.
For additional details, see our "About
Us" page.
