Conference 7.286::dcu

    
    
    	When my spouse and I applied for a Home Equity Line of credit
    	last year, she had to pay $5.00 to open 'her own' account, even
    	though she was jointly on mine.  So we paid the 5 bucks and
    	never used the account.  Recently we got a notice that said
    	if she didn't start making some transactions she would be
    	charged $2.50 per quarter maintainance charge because her
    	account was inactive.  My DCU rep said she would fix it
    	so there was no service charge (because I called and
    	challenged it?)
    
    	If DCU didn't make spouse join in order to complete a loan
    	application, maybe they wouldn't have so many 'inactive'
    	accounts.
    
    	If you received a notice like I did, call a rep and get	
    	and get it fixed.
    
    	Regards, Jim
    

        re .1 - it was an "oops" on the part of the DCU to open
        your wife's account as an "active" account.  Normally,
        in this type of case, the DCU opens the second account,
        flags it as "inactive" right from the start, and never
        charges any kind of "maintenance" charge.
        
        The DCU has a lot of inactive accounts.  Considering the
        cost of disk space, backup time, postage and handling of
        the quarterly statements, and so on, I think it's reasonable
        for them to charge for "storage".
        

re: .2

	I don't seem to understand what you're saying. (Which isn't new 
when I'm hearing about DCU policies.)  You're saying that there are two 
classes of inactive accounts; in one the DCU dodesn't charge any fees 
and in another they are allegedly justified in eating up people's 
balances.  If they can flag an account as "inactive" and keep it on the 
books for free, then why not put ALL inactive accounts into that 
category?  On the other hand if they are justified in collecting fees on 
inactive accounts, why should there be a class of inactive account that 
is exempt?

	I know that there are laws preventing financial institutions 
from eating the balances of people over or under a certain age, but that 
doesn't seem to be the case under discussion here.

					>>>==>PStJTT

Spoke to John Tilley this morning - says all you have to do to avoid 
the inactivity fee is to do one transaction per year.  Seems they're 
limiting themselves now to the VERY unused accts, just to cut down 
their statement mailing costs, and clean out the cobwebs.  Said that 
since the active users pay for the mailings on the 6-7 thousand 
accounts that are used less than once a year, this should make DCU run 
more equitably.

    
    If they were **REALLY** interested in saving mailing costs, why
    in hell do they mail 5 [FIVE] statements you my house every quarter?
    
    SAME last name and more importantly same mailing address!
    3 kids +wife+me have accounts.
    
    Can't they group when it makes sence?
    ed
    

        Re: .5 -- if the mailing is being done by an outside service,
        and the service charges on a cost-plus basis (e.g., whatever
        it costs for postage plus a fixed fee per statement), then
        they probably have no incentive to combine statements to the
        same address into the same envelope.  But it's certainly a
        good idea.  And it could result in cost savings, but it may
        not be under the DCU's direct control.
        
        Tom

I don't believe it's legal to combine bank statements like that.  The
laws basically protect the privacy of the account holders. Just because
the account owner is your spouse or child doesn't mean you have the
right to know what's going on their accounts. 

					>>>==>PStJTT

!
!I don't believe it's legal to combine bank statements like that.  The
!laws basically protect the privacy of the account holders. Just because
!the account owner is your spouse or child doesn't mean you have the
!right to know what's going on their accounts. 
!

        I disagree with the reply above, in that if they were of the same
        last name then that shouldn't be a problem.  Also I agree with a
        statement earlier of combining to save money.  With such a big
        resource as DEC available to the DCU (ie. Software Services), I
        can't see why the DCU couldn't do this themselves and save us
        members some money in the long run.



                                        Rich

     As a  hypothesis:    If DCU paid HIGH interest (and competitive with
     other CU's) rates  on savings!  And if someone were to leave $20-30K
     idle in this high-interest  bearing acocunt.  They should be charged
     an  "inactivity    fee"!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
     This must really cost DCU a lot to maintain, vis-a-vis ROI!!
     
     Now, if someone  has  a  $5.00  account  on  a  VOLUNTARY  basis, an
     inactivity fee would be  in  order.    [NOTE:   I do not consider it
     voluntary when my Wife must  have her own account in order to direct
     deposit  her  DEC paychecks into our  joint  checking/RSVP  account,
     which is under my badge number.   I understand that this is required
     by law.  I also have a few  non-DCU  accounts  with  ~$50.  in each,
     only  because  I needed "an account" in order to  get  my  mortgage,
     loan, etc.]
     
     BTW:    I  once  complained  at  the  savings  bank that I use about
     institution of  a  monthly  fee  (on  checking) without notice.  The
     branch manager told  me that it was against Mass.  banking laws (DCU
     operates under different regulations  as  a  Federal CU, so they may
     not have violated any law) and queried  the  main  office  (re:  fee
     without prior notice).  He never got a response, but told me that he
     wanted my business and would (voluntarily) flag all my  accounts for
     NO FEES whatsoever!  There is a different manager at the branch now,
     but  I  still  get  royal treatment (any DCU  checks  I  deposit  to
     transfer  funds  from  DCU  checking  to  savings  bank checking are
     deposited as CASH, no holds on  funds!).  Today, he is researching a
     way for me to open a trustee account for my retarded (adult) Sister,
     using her SSN, but not allowing her signatory  authority on account.
     [She is incapable of handling money and could easily be convinced to
     give all her money away.  However, she is an adult and since she has
     never  been  declared  incompetent  by  a  court,  she  is  presumed
     competent under  the  law.]  I  would never even think to ask DCU to
     open a trustee  account as above, I don't believe that they would be
     competent to do it properly!
     

.8>                                                    With such a big
.8>     resource as DEC available to the DCU (ie. Software Services), I
.8>     can't see why the DCU couldn't do this themselves and save us
.8>     members some money in the long run.
        
        Re: .8 -- what makes you think the DCU has some special access
        to Software Services, or any other part of DEC's resources?
        The DCU is NOT part of Digital Equipment Corporation.
        
        Tom

        re .10


                I know the the DCU is not part of DEC, but if the DCU spent
        some money short term it will save us some money in the long term.
        Is that more clearer to you???


                                                Rich

I don't believe the inactivity fee will be charged on a savings 
account if the accompanying checking account is active.

BTW:  Len - you don't need to open an account at an institution for 
them to give you a mortgage - if they require you do to so, they're 
breaking the law.  When presented with that proviso - I either 
question it, at which point it is dropped, or say i'll look into it, 
and don't -its never mentioned again.

        Re: .11 -- Yes, that's much clearer.  And I agree with you that
        the DCU may well have opportunities where investing today in
        preparing for the future will save money both now and in the
        future.  It just was not clear to me what DEC's Software Services
        organization had to do with this (except, perhaps, if DCU chose to
        hire them to do the work). 
        
        Tom

< Note 44.8 by 24630::DIIULIO "So...System been down long?" >
                             -< Just a thought... >-

>>!
>>!I don't believe it's legal to combine bank statements like that.  The
>>!laws basically protect the privacy of the account holders. Just because
>>!the account owner is your spouse or child doesn't mean you have the
>>!right to know what's going on their accounts. 
>>!

.8>        I disagree with the reply above, in that if they were of the same
.8>        last name then that shouldn't be a problem.  

I disagree with .8, if I am renting 1/2 of a house from someone who just happens
to have the same last name and has a DCU account, this should not give them
the right to see my bank statement.  How many "Smith"'s work for DEC?

-Kevin

    Carl Leeber
    {maintainer_of_batch_mailing_of_new_entries_to_DCU_BOD_Chair}

        A couple of years ago I took a car loan from DCU (at that time
        they had reasonable rates compared to the other places I
        looked).  I had to open a savings account first, so I placed
        $5.00 in the savings account.  I paid off the car loan fast
        (it was totally paid off about a year ago). 
        
        A couple of days ago I received a statement that had a $2.50
        service charge for `INACTIVE ACCT'.  I didn't like this, so I
        called DCU today to complain.  The call turned out well. 
        
        
        Me:  [I explained my problem.]  ``My main complaint is that I
             was never told about the service charge.'' 
        
        DCU: ``We don't feel it is necessary to mention the fee because
             we expect people who to open accounts to use the accounts.'' 
        
        [I didn't say it on the phone, but this is bogus.  Most banks,
        most legitimate companies of any kind, provide a list of all
        appropriate fees or notify customers before they charge a fee.] 
        
        Me:  ``I didn't want to open this account, you told me I had to
             open it.  I only wanted a car loan.'' 
        
        DCU: ``Can you hang on?''  [Me: `Yes.']  [Couple minute gap.]
             ``Your account will be credited with the amount of the
             service charge.  Would you like me to send you a card to
             close out your account?''  [Me: `Yes.']  ``Is your address
             still .....?'' 
        
        
        I liked the way they handled the problem, but I'm not sure about
        the explanation I received (before the conversation above).
        I was told: 
        
         o  The service charge is because of a federal regulation.
        
         o  An account with no transactions in a quarter is considered
            inactive for the quarter.  [This is different from the
            information in reply 44.4, which states that one transaction
            per year will prevent the fee from being charged.] 
        
         o  The $2.50 collected from each account is sent to the Federal
            Government, DCU doesn't keep it!
        
        Since I was told that the fee would be refunded, I didn't ask
        for more details about the federal regulation.  Does anyone know
        anything about this regulation?
        
        					B.J.

Hmmm... Granted, I don't know much about this, but it sounds fishy to me.
The government doesn't usually require transaction (or lack of transaction)
fees.  I wonder what regulation requires this fee.  If it's like other
fees and policies, DCU is just blaming their decision on federal regs. and
it might be another case of deception on their part.

However, I don't think it's unjustified to charge for inactive accounts
though, since there are expenses associated with mailings, statements, etc. 

I wonder what agency/purpose this money goes to?

- Jeff

>        
>         o  The service charge is because of a federal regulation.
>        

Not true - its because they are tring to get lots of inactive account 
off the books or carrying their own weight (publishing statements, 
ewtc, cost money). This is a legitimate reason.  What bugs me is that 
this ';federal regulation' seems to be the catchall answer to 
everything lately.

/j

    Perhaps they mean that a Federal regulations 'allows' them to do
    this.  :-)
    
    Kak

    They credit interest to it each quarter. 8-)

    /Ed

    Have to brush the dust off the DCU cap.
    
    re:.40
    
    Sorry, but crediting interest at the end of the quarter is not
    considered activity, neither is asking for a balance during the
    quarter.
    
    Activity is deposits or withdrawals making loan payments (if you
    have one.)
    
    Inactive accounts do cost money (how much I don't know, the powers
    that be didn't tell us) but why can't the Credit Union do what most
    other banks do and make the accounts inactive after seven years?
    
    Taking the cap off now..
    
    Roberta
    (former DCU employee from BUO)
    
    

    What does DCU mean by "inactive account?"  If I never touch my savings
    account, but my checking account is active, will they charge my savings
    account a fee for inactivity?

    Re: .21
    
    I *did* use a smiley face, didn't I? 8-)
    
    /Ed

    This is an official response by Mary Madden of the DCU. The portion of
    that response, dated 10-FEB-1989, that applies to this note topic is
    included below. See note 2.22 for more information. 
    
    Whether you agree or disagree with the response from the DCU, please
    either direct your comments to the DCU directly (dtn-223-6735) or
    post your comments as a REPLY to this entry in this conference.
    
    Carl Leeber
******************************************************************************
    Our sincere apologies to any member who received inaccurate information
    regarding Inactive Account Fees.  Typically, Inactive Accounts are
    former Digital employees with total shares less than $100 and no other
    loan or savings accounts.  These members have had no account activity
    (including CD and loans) for one year.  Excluded are members under 18
    and over 65. 

    It is neither a Federal Regulation to fee these accounts, nor does
    $2.50 go to the Federal Government.  Feeing these accounts is a DCU
    internal policy established for the following reason: 

    Our costs (statements, postage, printing, etc.) to maintain these
    accounts annually is approximately $8,000.  Therefore, it is more
    economical for DCU to fee these accounts.  A member always has the
    opportunity to close or activate his/her account at no charge.  We
    welcome this action. 

    To avoid the $2.50 quarterly fee, a member must have annual account
    activity. Account activity is defined as a deposit, a transfer among
    shares or a withdrawal. 

    Beginning in 1989, we will notify all dormant accountholders (accounts
    with no activity for at least two years, regardless of balances).
    Inactive accounts for 7 years will be subject to escheat laws.  If
    determined to be escheat, the funds will be mailed to the Commonwealth
    of Mass. for their disposition in accordance with applicable laws.  The
    state initially tries to locate accountholders by advertising names.
    With no positive response from the member, the state appropriates the
    funds.  It is therefore imperative that members' addresses stay current
    on the DCU database. 
******************************************************************************

    So, if I understand this, someone could have $10K in an account
    being saved for retirement, and unless he has a transaction, he
    will be charged this fee, and after seven years his account will
    be turned over to the state.
    
    I'm sure one of my other financial institutions would be glad to
    have my money sitting there dormant for several years.
    
    Or, to avoid the charge, the person could withdraw $1, and then
    redeposit it.  I'm sure this meaningless transaction must cost DCU
    something.  So, this policy encourages members to cause DCU to incur
    an expense to avoid a service charge.

    This sounds like a policy some deranged government official would
    come up with.
    
    Bob

    Ooops.   I see I missed the $100 maximum balance.  So, I guess I
    need to deposit $96.
    
    Bob

    re: .25
    
    Other financial institutions have similar policies.  The exact
    details (amount of service charge, how long before it kicks in,
    etc.) may vary, but the concept is basically the same all over.
    
    Most, if not all state governments have laws that deal with turning
    inactive accounts over to the state.  How else do you want to handle
    abandoned accounts?  I don't think they force you to make a transaction
    on the account, but they do force you to come forward and admit
    to ownership.  They need to tell the difference between an abandoned
    account and one that has merely been allowed to sit idle.
    
    Besides, if you have $10K that you just want to sit idle for a long
    time, you're much better off putting it into CD's instead of a savings
    or draft account.
    
       Gary