Over the Counter Transaction Fees: Overview

A credit union incurs costs for all member transactions, whether it be a cashed check, a deposited item, or any other service. Generally, if a member is an active participant in the credit union, these transaction costs are covered by the income the credit union generates from the member, either through share accounts or loans held by the member.

However, in some cases it becomes necessary for the credit union to charge a fee in order to offset a member transaction. For example, a fee might be charged to members who use an ATM card, to offset the cost of ATM transactions to the credit union. Or when a check is returned NSF, a fee is charged to offset the cost to the credit union of processing that bad check.

The concept of direct fees based on direct expense is a form of cost accounting. Recognizing the true costs of transactions can be very difficult in some cases. However, if a credit union is going to be successful it must do its best to understand that operational costs should be directly related to operational income offsets. In other words, all members should not be charged because of the special needs of a few members.

The fee configurations discussed here are designed to help credit unions set up a system of fees which offset unusual transaction expenses. They can also provide an incentive for members to become more active in the credit union, in order to avoid incurring fees—and an active member helps the credit union offset operational expenses through normal lending or investment income.

Interested in Learning More about Your Fee/Waiver Income?

See the Fee Waiver Information Report and the online Fee Waiver Analysis.

Over-the-Counter Transaction Fees Available in CU*BASE

Fee Type	When are fees charged?	Fee Options
Deposit Item Fee	Batch posted at the end of the month.	Fee per item deposited; number of items allowed free of charge, either per day or per month.
Cashed Check Fee	Interactively posted at time of transaction, through miscellaneous receipts.	Fee per item or per transaction, as a flat fee or % of checks cashed; number of items or transactions allowed free of charge.
Printed Check Fee	Interactively posted at time of transaction, through withdrawal from the member account.	Fee per item printed; number of items allowed free of charge, either per day or per month.
Printed Money Order Fee	Interactively posted at time of transaction, through withdrawal from the member account.	Fee per item printed; number of items allowed free of charge, either per day or per month.
Phone Transfer Fee	Interactively posted at time of transaction, through withdrawal from the member “FROM” account.	Fee per transfer; number of transfers allowed free of charge, either per day or per month.
Self Service Fees (Audio Response and Online Banking)	Batch posted at the end of the month.	Fee per minute used; number of items allowed free of charge per month.

Understanding Fee Waivers

As you can see, setting up a fee structure requires many decisions on the part of credit union management. By setting up conditions for waiving fees, a credit union can encourage members to act in a way where unusual transaction expenses can be offset by traditional credit union income. This gives members the power to keep fees down, and generally will be a more productive way to work with your members.

For example, say that ABC Credit Union wishes to recoup handling costs on deposited items over 100 per month. This could be set up as a straight fee of 10 cents per item over 100 each month, with the income credited to the G/L during end-of-month processing. But should fees be charged to a 15-year-old paper boy? What about members with excellent savings and loan balances?

To handle these considerations, CU*BASE provides the following fee waiver options. For interactive fees that are charged as part of a transaction, you can choose whether or not the teller or member service rep can change or waive the fee on a case-by-case basis at the time of the transaction.

Waiver Options

Field Name	Description
Low and High Age	Use age waivers if you don't want to charge the 15-year-old paper boy depositing payments for the month or requesting a handful of money orders because he is too young for a regular checking account, or if you want to make exceptions for senior citizens.
Aggregate Balances	At what balance do the member's savings accounts provide enough income on spread to offset the unusual transaction expenses? At what balance do the member's loan accounts provide enough income on spread to offset the unusual transaction expenses? Aggregate balance waivers measure a member's account balances to determine whether or not the member should be charged fees.
OTB Accounts	These options let you waive fees to recognize other account relationships members have with your credit union. Options include waivers for the following “off trial balance” (OTB) accounts tracked using CU*BASE OTB features: credit cards, ATM cards, debit cards, and OTB loans and savings accounts.
Tiered Service Level Scoring	In addition to the waivers available in fee configuration, your credit union's Tiered Service Levels program can be set up to waive fees based on the member’s monthly Tiered service score. For more information, refer to the Tiered Services Levels Implementation Guide booklet.
Marketing Club Membership	In addition to the waivers available in fee configuration, your credit union's Marketing Clubs can be set up to waive fees based on active membership in a Club. For more information, refer to the Marketing Clubs booklet.
ANR Fee Cap	Used to set daily (business day) maximums for the amount of ANR fees that a member could potentially pay. The fee cap configurations apply to ANR fees only and include check postings, in-house drafts, ACH, ATM/Debit (online) transactions, and bill pay transactions.

Charging Fees in Member Transactions

Remember that most over-the-counter fees can be configured to allow fees to be changed or waived on a case-by-case basis according to credit union policy at the time of the transaction. Tellers should be carefully instructed on how to use the screens to adhere to your credit union's policies.

Use the links below to take a look at the screens used to actually charge over-the-counter fees during member transactions:

Teller Posting - Check or Money Order

Teller Posting – Teller Posting (for Deposit Item Fees)

Phone - Member Account Transfer

Fee Counters for Individual Members

On occasion, a member may question why a certain over-the-counter fee is being charged, or the credit union may wish to modify the “counters” used to determine whether or not a member should be charged a fee. This can be done using the Fee Master Inquiry/Maintenance feature.

Tracking “Missed” Fee Income

For all of the over-the-counter fees described above, as well as bill payment service charges, member starter/replacement checks and monthly minimum balance, transaction and account service charges, CU*BASE provides a single Fee Waiver Information File that tracks every time a fee is waived for any reason.

With the data in this file, you can effectively evaluate the effect your configured waivers have on your fee income, allowing you to make adjustments to waivers—instead of the fee amount itself—that have an immediate affect on revenue from fees. If you allow fees to be changed or waived by staff at the time of the transactions, records will appear in this file so you can keep a handle on compliance to your credit union's policies.

CU*TIP: If you wish to create a custom report using the CU*BASE Report Builder (Query), the file name is FWHIST. You may also print a copy of the Fee Waiver Information Report.