Conference 7.286::dcu

    I was also a member of WCU when it was associated with Digital (pre-DCU).
    
    I had a mortgage with them too - great rate, low, low closing costs,
    great service.
    
    I almost went back to them during the "witch hunts" at DCU, but held
    on to see what would happen at DCU.  The way things are unfolding at
    DCU, I think WCU will be getting another look from me quite soon.
    

I've seen and heard a lot about Worker's Credit Union.  Thus far,
they strike me as the Complete Working Model of How a Credit Union 
Should Be.

./chris

    
    What criteria does one need to be a "valued member" of WCU?  Do you
    think that we could do something crazy like, disolve DCU and
    re-associate WCU with Digital (after a leg has festered too long, it is
    time to cut it off)?
    
    ~Jon.

    
    	I have been with DEC for 20 years.  I too was with WCU when DCU
    	came aboard.  Due to convenience, I switched to DCU, but also
    	kept accounts at WCU.  I had borrowed from WCU something like
    	9 times, and once established there, I was able to arrange most
    	loans with a phone call in the morning, and then drive to Fitch-
    	burg in the pm, or as late as the next day to pick up the check.
    	Very simple, no problems.
    
    	In the entire time that I have been with DCU, I have never been
    	able to get a loan with DCU.  Yet, I currently have excellent
    	credit, two major mortgages, a loan on land, just paid off a
    	student loan, have had and still have several credit cards.  The
    	land loan is in need of refinance (5 yr balloon that ran out),
    	so, hearing that DCU had $100M to loan, thought (silly me) that
    	maybe they might be able to spare $13K.
    
    	But NOOOOOOOOOOOOOO......  Sorry, we only do loans on purchase,
    	no refinance, sorry, our minimum is $50K.......,  Sorry, we only
    	do 3 year balloons,,,,,,
    
    	Well, I'm sorry too......  I am now investigating the bank 2 miles
    	from my home to see if they do direct deposit.  I don't care what
    	the fees and rates are.  I opened a business account with said 
    	bank recently, and my god.... they were friendly, willing to do
    	business.... oh, need a cashiers check, you have an account with
    	us? no charge for the check, can we fill it out for you?  Anything
    	else sir?????  Somehow I really got the feeling that they wanted
    	my business, and cared....  Remember that DCU, caring????
    
    	Sorry for the rambling.  Anyway, I also will maintain a minimum
    	$5 balance, and make sure that it is announced when I do it.....
    	I also will remember the snotty 'service' that I have received
    	from DCU, and use that as a lesson to never treat my own valued
    	customers like that..........
    
    	Glenn (absolutely fed up with DCU trying to be a big bank!!!!!!!)
    

Again, to all those noting in here, send your comments to the Directors,
so that DCU has them on record.  In here, they only mean something to the
few directors who read this conference.

The addresses are in 5.1


Stuart

	Gee, I wonder if they do VA loans? If so, I'm going to 
	seriously consider moving after 12+ years at the DCU.
	Hell, just the $2-4 a WEEK I rack up in ATM charges
	would be significant!

	Anyone have their number?

						mike

    
    >Want to buy a car?  I just got an invitation from WCU.  They made a
    >cooperative with local car dealers for lower prices to WCU members.
    
    Didn't DCU do this a few months ago? I thought I read about it here.
    
    >	 Worker's Credit union		DCU
    >
    >36 months	5.49%			6.9%
    >
    >48 months	6.29			7.5%
    
    Are terms the same? Are both for financing 100% or is one up to 100%
    and the other up to 80% for example?
    
    		Alfred

    
    Is it still true that Digital does not offer direct deposit into
    WCU accounts (checking/savings)?
    
    Lou
    

All you have to do is fill out the form from personnel and send it in.

Dave

    When a benchmark is done, please make sure current data is used.  I
    keep reading about people complaining about loan rates from years ago. 
    I've been getting a lot of credit card applications in the mail lately
    and from what I've seen, DCU Visa has them all beat in terms of
    interest rate.

    
    >DCU visa has them all beat in terms of interest rate
    
    
      I can provide 2 current datapoints:
    
      NAVY FEDERAL CREDIT UNION  - No Fee,  11.95%		~25 day grace.
      USAA                         No Fee,  12.5% (Variable)    ~25 day grace.
      
    

    How many branches does WCU have and where are they located?

In this week's Newsweek is a full page pull out ad for
a Wachiova Bank Visa card.

The annual rate is Prime + 2.9% (prime is at 6% so the
rate is 8.9%.)

Annual fee is $39.

Gim

There is a Worker's Credit Union branch in Gardner.  There is also one in
Groton, since they just took over Nashoba Credit Union.  There is another branch
in Lancaster, which I think they gained when they took over Heritage Federal
Credit Union.

Another feature that Worker's Credit Union offers, at least they used to offer
it at the branch in Gardner when I lived there two years ago, is "workers'
hours".  The Gardner branch opened, at 7:00 am, and I'm pretty sure they had
Saturday morning hours.  As far as I know all their branches are in standalone
buildings or store fronts.

Elaine

For The Heck Of It, I benchmarked DCU against three local credit unions (read:
NOT BANKS) that were open to any member without affiliation with any particular
group. Grafton Credit Union is open only to residents of surrounding towns. Of
course, DCU requires a current or past employee relationship with Digital
Equipment Corporation.

Draw your own conclusions.

Chris


DB refers to Average Daily Balance for the month
fees are per month unless otherwise noted

                                                Worcester       Grafton
                                Millbury        Community       Suburban
                                Credit          Credit          Credit
Mark            DCU(proposed)   Union           Union           Union
----            ---             -----           -----           -----

fee to join?    $5/savings      $25/savings     $25/savings     $25/savings

checking        $4/mo if        (2)             $.25/check      $.25/check
account         DB <$500                        if DB <$250     if DB <$500
fee?            or (1)

per check fee?  no              12 free/mo      no              20 free/mo
                                >12 $.10/check                  >20 $.25/check
                               
interest rate?  2.30%           2.50%           3.40% on lowest 2.25%
                                                DB of month     >$10K 2.75%
                                                
ATM trans       DCU ATM free    MCU free        WCCU free       not
fees?           foreign $1      foreign $.75    foreign $1      offered

savings         $2/mo if        no overall      no overall      no overall
account         DB <$100        fee             fee             fee
fee?

interest rate?  2.76%           2.50%           3.25%           3.00%

Credit cards?   Visa            Visa            MC or Visa      not offered

annual fee?     $15             (3)             (4)             N/A

interest rate?  11.90%          13.90%          13.90%          N/A


(1) - fee waived if relationship member, if any of these are true - 
       a) $3500 in balances (not clear if DB) in all accounts combined
       b) $3500 in loan debt
       c) DCU mortgage that has been sold on the secondary market
       
(2) - fees vary according to DB - 
       >$400    no fee
       $300-399 $0.50/mo
       $200-299 $1.00/mo
       $100-199 $1.50/mo
       $  0-100 $2.00/mo
       
(3) - first year, no fee - subsequent years, no fee if card is used

(4) - first year, no fee - subsequent years, $15/yr

                                   

Chris,

Thanks for doing that legwork, and posting the results for us to see!  You may
have just given a lot of people good reason to join Worcester Community Credit
Union!

I think it is also significant to note if the credit unions compounded interest
daily, and when they post the interest.  As we all know, DCU posts quarterly. 
Two credit unions I can join, IC FCU and NASA FCU, each post interest monthly.

Elaine

I hope you mean calculate the interest on the average daily balance and post 
it monthly ...

I know of no organization that compounds daily (except loan sharks!!!).

There is an awful lot of confusion regarding the concept of calculating and
compounding interest.  Interest is compounded when the interest earned is
added to the principal and starts earning interest in its own right.
In the case of DCU Share 1, this appears to correspond to the posting,
thus, it is calculated daily, and compounded quarterly.

In the case of a loan, the same idea, except that it is the period when
the interest is added and usually corresponds with the payment frequency.

Stuart

>>I know of no organization that compounds daily (except loan sharks!!!).

I used to have many day-of-deposit to day-of-withdrawal compounded daily
interest bearing accounts, back in the early days of "statement savings"
(as opposed to "passbook").

However, this too seems to have vanished into banking history.

bruce

On September 21, I fax this letter to the DCU. Within four hours
Katy from the DCU called back and confirmed that interest is
indeed compounded daily with the result posted quarterly. I asked
that she verify the algorithms with the programmers and
she did and reconfirmed the above.

I have not actually seen the code - but she was very knowledgeable and
knew the details of compounding daily vs quarterly.

The response from the DCU was quick, professional and answered
my questions.


Gim



						
						Sept. 21, 1993

	Ms Julie Moran
	Digital Employees Federal Credit Union
	141 Parker Street
	P.O. Box 130 
	Maynard, MA  01754


	Dear Ms. Moran,

	The term "dividends compound daily" is used throughout the DCU
	Truth in Savings Disclosure.  The definition of "compound" is
	that dividends are paid on dividends for the compounding period.
	$300 Million on deposit for 365 days would result in an dividend
	of $18,549,393 assuming a dividend rate of 6.0% compounded 
	daily in the exact sense of the word.
	
	On page 3, under CHECKING ACCOUNT, "dividends are paid on all
	funds on deposit for each day ...  and are posted quarterly.
	Paid dividends on deposit will earn dividends at the same rate
	and on the same terms."  This implies that dividends are earned
	only after dividends are paid.  $300 Million on deposit for one
	year using quarterly compounding results in an dividend of
	$18,409,065 assuming a dividend rate of 6.0%

	The difference between the two methods is $ 140,328. Of course,
	the difference will vary with different dividend rates.

	Which method does the DCU use to calculate dividends? Are
	dividends really "compounded" daily or are dividends
	"computed" daily but compounded quarterly? 
	

					

					Sincerely,


					Gim P. Hom

Ones needs to be careful here. I believe that the new Truth in
Savings law has deemed "interest on lowest balance" of the month
to be illegal.  My checking account fluncuates by thousands over
a 30 day period. I would be RIPPED if I were paid on the
lowest balance of the month.

Gim

>                                     Worcester                   
>                                     Community                   
>                                     Credit                      
> Mark            DCU(proposed)       Union                       
> ----            ---                 -----                       
>                                                                 
> checking        $4/mo if            $.25/check                  
> account         DB <$500            if DB <$250                 
> fee?            or (1)                                          
>                                                                 
> interest rate?  2.30%               3.40% on lowest             
>                                     DB of month                 
> 

But Gim, the new truth in savings law does not go into effect for credit unions
for another year.

DCU is doing us a favor by publishing it now, because DCU considers banks as our
major competitors.

If you want to compare DCU truth in savings to another credit union, you have to
wait a few months.

Elaine

I only posted what I was told. For further information, contact the credit
union in question.

Worcester Community does compound it's interest daily. I don't know when it's
posted.

Chris

    I would be incredibly surprised if they really compounded daily ..
    but it looks like I might have to be.
    
    The question then is, if you deposited $100,000 at 4%, how much would
    be in the bank at the end of a year.
    
    Compounded quarterly it would be $104,060
    
    Compounded monthly it would be a little more than that
    
    Compounded daily it would be a LOT more than that!
    
    Stuart

$100K at 4% compounded:

Annually:	$104,000
Quarterly:	 104,060
Monthly: 	 104,074
Daily:		 104,080
Continuously:	 104,081

    At 4% it hardly matters, but at 10% + or, when you are PAYING interest
    on a mortgage ... it matters!!!!
    
    Stuart

I got a mailing from my other credit union yesterday:

It was an offer to move a credit card from another institution to SSFCU.  The
application had four lines:

Other company name
Other company account number
My SSN
My signature

They offered me $4,000 at 8.75%.

For the record, here's the rest of the SSFCU rates:

Loans:

New Auto 90%/48 mo	6.75%
         90/60		7.25
        100/48		7.75
	100/60		8.25
Used auto 1989+/36 mo  10.25
	  1988-/30     10.90

Credit Line Plus	16.9
Visa/Visa Gold		11.75
Signature/36 mo		18.00
Savings/Stock		Investment rate+3%

RE Loans (2nd mgtg)  85%/180 mo 8%
Property improvement 80/144	11.5
 (on improved prop)  80/60	10.00

Checking	No fees if combined checking/savings balance exceeds $100,
			else $3/mo
Savings Plus		3.00%	3.04% yeild
Checking Plus ($300min) 2.00	2.02
Super Check + ($500min)	2.05	2.07

CDs			Rate	Yeild
 6 Mo "+"		3.80	3.87
 6 Mo 500 Min		3.70	3.76
12 Mo "+"		3.90	3.97
12 Mo 500 Min		3.80	3.87
24 Mo "+"		3.95	4.02
24 Mo 500 Min		3.85	3.92
36 Mo 500 Min		4.25	4.33

    It's not a credit Union, but I got a new car loan fro my Suburban from
    GMAC for 6.5% for 60 months.   That is .125% LESS than the mortgage
    that I had recently closed with DCU (at that time the 6.675 was the
    best 15 year rate).
    
    Sigh, I thought these people wanted our BUSINESS, not just to give use
    the business.  (Yes I kow I have a relationship, and because of that, I
    can be lazy for a while about leaving, but the time will come that
    feduciary responsibility comes to me and points out that DEFICIT living
    is not the way to go.
    
    Bill
    

    
    Re: .37
    
    > Some would argue that instead of this financing rate you could have
    > knocked the price down, financed at a slightly higher rate with someone
    > like DCU, and received a better overall deal.
    
    OK so how about knocking the price down and *still* financing with GMAC
    What you are discussing has to do with how tough a negotiator you want
    to be which has nothing to do with the interest rates per se.
    
    Steve
    
    
    

        Re.37

    The price was within $800 of list (as obtained from Consumers Union).
    I would NOT go for a low rate at the cost of a higher price.  I was
    surprised about the rate, but when you spend that much for an vehicle,
    you kick in to a different bracket for financing it seems.  My deposit
    was also 30% of our cost of the vehicle.

    It was NOT bought in or near Nashua (they didn't seem interested in
    dealint as they felt they could sell retail, take it or leave it.  Also
    they ordered them with optins I han NO interest in such as under frame
    crash plates to go with the 4 wheel drive).
    
    It was off a lot, and (except for a little fancier audio than we would
    have ordered) was as we would have ordered a Suburban to the color and
    rear door configurations, and set up to tow 5 tons.
    
    Bill

    a nice digression and I agree with both of you.  When I bought my
    Blazer, there was not much haggling with the salesman because he knew
    that he could sell to someone else if not to me.  And the price made me
    feel like I was buying a house, but in reality, there's no way to
    compare mortgage rates with car loans.
    
    Mark

    My point, before the digression was that approximately 1 month after
    getting a 15 year DCU mortgage, I got a car loan, for 60 months, with a
    LOWER interest rate.
    
    The point here is if a mortgage cannot beat a car loan (no points on
    the car loan either and it was about 1/5 of the size of my mortgage),
    who do they think they are compeating with ?
    
    We have seen many examples of BANKS what beat DCU rates, even though
    they profess to be "better than a bank".  In return, we receive less
    interest on our savings also.
    
    If DCU RAISED savings interest (attracting more savers) and LOWERED
    loan interest rates (and eliminated more points from mortgage
    applications), they would still MAKE money, preserving the almighty
    capital ratio.
    
    Woops, that would not work, because they would satisfy their
    MEMBER/OWNERS also.
    
    WHY IS THIS NOT THE OBJECT OF THE BOARD?
    
    WHY DOES THE BOARD THINK THE MEMBERSHIP IS BANKING WITH DCU TO ABUSE
    THE FACILITIES AND PRODUCTS PROVIDED?
    
    WHEN DID THEY EVER ASK THE OWNERS WHAT WE WANTED THE CREDIT UNION TO
    BE?
    
    (I assume it would be loud and clear to all but the upper echilon that
    we DON'T want the BANK OF DIGITAL).
    

	Saab's currently offering 0%/48 months if you put 40% down.

					--Doug

    Re .42
    
    I think you are missing my point:
    
    Why should a company (DCU) who's aim it is to sell MONEY not be
    competitive with it's peers at least (Credit Unions)
    
    when
    
    AFTER negotiating a price, a more attractive financing alternative is
    presented by an auto dealer.  I considered DCU, for about 30 seconds
    (long enough to look in the brocure).  I would have met any and all
    criterion for the best rate they offered at the time.  They (a
    financial company who sells MONEY) didn't come close to GMAC (a car
    company that happens to also sell money for their cars).
    
     

DCU should be competitive with its' peers.  But GMAC
is not a peer (although at times it is a competitor).
GMAC is doing its job if you buy the car and they make
$0.00 on the loan.  The same is not necessarily true of
DCU (which needs to make money somewhere and that somewhere
is usually on loans).

Collis

    RE: -1

    >DCU should be competitive with its' peers.  But GMAC
    >is not a peer (although at times it is a competitor).
    >GMAC is doing its job if you buy the car and they make
    >$0.00 on the loan.  The same is not necessarily true of
    >DCU (which needs to make money somewhere and that somewhere
    >is usually on loans).

    	You've totally lost me, since when is it GMAC's job to loan you
    money and not make anything on it?  They've always charged me interest
    when I've financed a vehicle through them.  If this is a new program
    they have please let me know how to access it as I could use another 
    new vehicle.

    Joe

    GMAC's job is to make it easier for GM to sell cars.  They are
    not necessarily out to make a profit from loans themselves.  They
    rely on the cars making a profit.  Thus, like a CU, they should
    be offering loans at cost, or at least average out loans at cost.
    
    As a result, they are able to loan money out to buy cars at
    amazingly low interest rates, and sometimes below cost if it will
    help GM move cars.  Of course, because of averages, only selected
    models will be given discounted rates.  The discounted rates will
    be made up for by standard rate loans for other models.
    
    So, in this way, comparing GMAC ... viz profit is not it's goal ...
    and DCU is actually amazingly valid.
    
    DCU should not be making money (beyond what it takes to fund other
    operations) on its loans in much the same way.
    
    Stuart

    this line of thinking about GMAC's goals could also be applied to DCU. 
    Since most of us are consumers, we think that the credit union should
    be for our benefit (and it is).  I wonder if DCU is a greater benefit
    to Digital Equipment Corp., and therefore it listens more closely to
    Digital than to the employees?
    
    Mark

    Well, they (other banks) still win,
    
    	I was looking at replacing our current camper trailer (why we
    	bought the Suburban).   Had our eye, if we bought this fall on two
    	and could not make up our minds.  (We ended up NOT doint it, but
    	that was Sunday we decided to keep our wits abot us).
    
    	Thursday at 2PM on the phone "applied" for a loan on x thousand
    	dollars for one of the two trailers.  Name, and SSnum needed.
    
    	Friday 11AM had approval for 85% of a camper trailer, 10 years
    	for either at 9.75%.  (I thought this a bit high, but, I'm nieve).
    	Paperwork was in the trailer dealers when we went to look on
    	Sunday to make up our minds.  I saw it (the salesman really
    	tried, and we do like the dealership and will probably by from them
    	if/when we by new).
    
    	For grins, I picked up the October 4 "DCU Rate Information" brocure
    	(how much do we spend issuing these weekly instead of posting the
    	rates on the wall, OUTSIDE the DCU or near the ATM ?) and found:
    
    		1) I remember the experience of applying for a loan, I
    		   need name, SSN, age, place of birth, rights to my
    		   first born, etc.
    
    		2) They would finance 75% for:
    			12-36 months at 8.90% (nice if I could afford the
    						payments)
    			48-60 months at 9.90% (Higher, and the payments
    					       would still be a bear)
    
    		3) No min/max dollar value showing for these rates in
    		   the brocure so I don't know if the amount would raise or
    		   lower the rate.
    
    
    	And, folks, this is not GMAC (an AUTO business) this is a bank
    	contacted by the dealership (and probably pays them a kick back
    	(woops finders fee) for the business).
    
    
    Nuf said,
    	Bill

    I just opened my monthly statement and found the Network comparison of
    DCU's VISA against that of 4 commercial banks.  I figure that if they
    aren't going to compare themselves against credit unions then they
    ought to compete in the real world.  So, here is comparitive data
    on the credit offers I've gotten in the mail in the last month.
    As you can see, ALL BUT TWO are better than the DCU with relationship
    and (for those who pay off quickly) EVERY ONE is better than the DCU
    without relationship.
    
    Institution		Interest	Annaul fee
    DCU			13.5% (1)	$15/$25 (free with relationship)
    Chase		9.4%		none
    Westminster Bank	9.9%		none
    Signet Bank  M/C 	8.9%		none
    Signet Bank Visa	9.9%		$18
    AAA			8.9% (2)	none (but must be AAA member)
    Colonial Bank	12.9%		none
    
    (1)  11.9% if $2,500 avg daily balance, which I don't think anyone
    	 should ever have on a credit card if they can help it, FYI.
    (2)	 Sucker rate -- goes up to $17.9% / 15.9% after 6 months.
    

re:  .50

Yup, I was chuckling over this last night as well.  Here we
are comparing ourselves to those wonderful commercial banks
again, and boy don't we look great....

Can somebody tell me where in "Digital Employees' Federal
Credit Union" are the words "Commercial Bank"?  

Inquiring minds want to know...

./chris

    Larry,
    
    You and I both know that consumers are not likely to shop around. 
    Adverts. such as this are supposed to make your own product look good,
    but not tell the whole story.  By the way, you did not include the BEST
    feature of the DCU VISA in your comparison.  DCU members can
    automatically payoff the card's balance, thereby paying no interest at
    all.  How many of your competing banks offer that?
    
    Mark

	...who cares where the card is issued?

	Yup.  My Bank One Visa Gold is no annual fee as long as I use it once
a year.  13.9% (but I never carry a balance.)  They issued me a $7500 credit line
on an application on which I declined to provide my SSN, and raised it unasked
by $2k the following Christmas.  I have never paid them a cent in fees or 
interest.

	I get at least 1 credit card solicitation a month.  Most are no fee.


							--Doug

My VISA card is a Citibank FORD credit card. I receive
a 5% rebate on every purchase credited toward the purchase
of a Ford vehicle.

The fine prints states that you get the rebate from FORD and
after you've negotiated the best deal from the dealer.

Citibank also has an unadvertized program whereby cardholders
with impeccably credit rating can get a 2% rebate on all purchases.

Since I plan on buying a FORD Villager in the future, I opted for
the FORD VISA card.


Gim

    
    RE: .52
    
    >>DCU members can automatically payoff the card's balance, thereby paying
    >>no interest at all.  How many of your competing banks offer that?
    
    In Mass., this is the law (a minimum of a 25 day grace period for new
    purchases).
    
    ~Jon.

    Jon,
    
    I do nothing to pay my DCU VISA card balance.  I signed a card that
    authorizes DCU to take funds from my savings and pay off the balance. 
    I now use my DCU VISA as if it were a debit card and prefer it over
    other cards that I will have to write a check and mail each month.
    
    Also had the option to pay just the minimum payment, but why would
    anyone want that?  :-)
    
    Mark

    re: .52
    
    >feature of the DCU VISA in your comparison.  DCU members can
    >automatically payoff the card's balance, thereby paying no interest at
    >all.  How many of your competing banks offer that?
    
    Well, Fleet Bank for one. FWIW, their cards (including gold) have no
    annual fee if you meet their definition of "relationship." I felt the
    DCU brochure was misleading in that respect.
    
    re: .54
    
>Citibank also has an unadvertized program whereby cardholders
>with impeccably credit rating can get a 2% rebate on all purchases.
    
    Does this program have a name, & what's the annual fee?
    
                                                           

Re: .58

>>Citibank also has an unadvertized program whereby cardholders
>>with impeccably credit rating can get a 2% rebate on all purchases.
>     
>     Does this program have a name, & what's the annual fee?

Program is called the Choice program. You
have two options:

2.0% rebate, $25 Annual fee
1.5% rebate,  20 Annual fee

Their 800 number is 800-950-5114.  

Gim

    My Choice VISA has a rebate and no annual fee.
    
    Mike