Conference 7.286::dcu

    I'm confused over these numbers:
    


�                      DIGITAL EMPLOYEES' FEDERAL CREDIT UNION
�                            Board of Directors' Meeting
�                                  March 23, 1993
     
�    As requested by Mr. Gransewicz at the last Board meeting, Ms. Madden
�    presented an overhead outlining DCU ATM Card Penetration.  Mr. Gransewicz
�    requested that copies of the overhead be distributed to the Board.  The
�    following information was noted:
�     
�    - 1,045 ATM cardholders (3.7%) hold savings accounts with DCU
�    - 29,188 ATM cardholders (62.4%) hold checking accounts with DCU
�    - DCU has issued 30,593 ATM cards to its membership
�    - There are currently 46,453 savings accounts open at DCU
�    - There are currently 46,789 checking accounts open at DCU
     
    How can only 3.7% of ATM cardholders have savings accounts?  I thought
    everyone had to have a savings account to be a member?  And if I total
    the numbers up, only 66.1% of the ATM cardholders even have an account
    with the DCU.  This makes no sense.

    
    
    It probably means they hold _only_ savings accounts.
    
    Likewise,  the "checking account" numbers probably  are people
    	with checking and savings.
    
    
    						-al
    

    
    RE: .1
    
    62.4% (29188/46789) of members with checking accounts have an ATM card.
    
     2.2% (1045/46453)  of members with savings accounts ONLY have an ATM card.
    			(3.7% appears to be an error)

    Thanks, that's not what the minutes said (or at least that's not what I
    interpreted them as saying).  

>    - During a normal month, DCU experiences approximately 70 - 80 new VISA
>      account openings and 40 - 50 VISA account closings.
>    - During the month following the charging of Annual VISA fees, DCU
>      experienced 112 new VISA accounts opened and 224 VISA accounts closed.
>      The closed account figure is an increase of approximately 150 closings
>      compared to regular months.  However, this figure is equal to the number
>      of closings during the same time frame in 1992.
 
    Has DCU done an analysis as to why they lose almost as many accounts
    each month as they gain?
    
    

    What's interchange income?

>    b.  Non-Sufficient Funds Update
>     
>     
>     
>    At 2:56 p.m., Ms. Mann and Mr. Milbury left the meeting.
    
What happened to NSF update?
    
    Bob

    
    Yes, they did Bob but to tell you the truth I can't recall what the
    results were.  I believe they analyzed one month's worth and that month
    was the month that the fee was charged (Feb.?).  Whatever the analysis
    result was, the result that no change was made to credit cards.
    

>    Member Complaint Update
>     
>
>     
>    Member Complaint Update
    
    Phil, are you having problems getting the minutes in Notes or is this
    part redacted, or ??
    
    Thanks,
    
    Bob
     
     
     
    

>    b.  Deed of Trust
     
     
What's this all about?     
    

    re: .8
    
    Phil, I hope all my replies don't sound like I'm trying to pick on you.
    
    Seems like February wasn't a real representative month.  Perhaps
    another/more month(s) should be analyzed.  Not knowing whether the
    closed accounts/new accounts ratio is normal for the industry, I have to
    wonder if DCU policies are causing a higher than normal amount of
    closings.
    
    So, yes, if you would find out, I'd be interested in the results.
    
    Thanks,
    
    Bob

    The way I read it, the change in the fee could have caused the
    cancellation, except that last Feb. with no rate change showed about
    the same drop.  Maybe people are cancelling their cards after paying
    off their Christmas debts.

    Re the following from the minutes:
    
>    Ms. Dawkins noted that non-relationship members with high interchange
>    income are very profitable to DCU.  She requested that the 30 accounts
>    should be analyzed further to look at their interchange income totals.  Mr.
>    Cockburn agreed to provide this information at a future Board meeting.
    
    Was this information ever provided? I can't see any record of it in the
    April or May minutes. Shouldn't high interchange income be a criteria
    for waving annual fees? Wouldn't this prevent people such as the author
    of the attached taking their credit card business elsewhere? How many
    months does it take to do further analysis on the 30 accounts?
    
    Dave

                    <<< SMAUG::USER$944:[NOTES$LIBRARY]DCU.NOTE;5 >>>
                                    -< DCU >-
================================================================================
Note 608.103             DCU VISA vs No annual fee cards              103 of 103
ALFAXP::HICKS                                        35 lines  19-MAR-1993 14:45
                       -< Another one bites the dust... >-
--------------------------------------------------------------------------------
Here is a copy of the note that I sent to Chuck when I cancelled my VISA Gold
Card.

						March 19, 1993
Mr. Chuck Cockburn
President
Digital Credit Union
P.O. Box 130
Maynard, MA  01754-0130

Mr. Cockburn -

My wife and I have two VISA Gold Cards.  One is from DCU and the other is from 
AT+T.  Because we have a large family, we charge several thousand dollars on 
VISA each year.  We used to use our DCU VISA card exclusively so that our 
credit union would benefit from the transaction fees.  However, when DCU 
announced that it would impose an annual fee to those members that do not have 
a "household relationship", we decided to switch to using our AT+T VISA.

In short, all other things being equal, we would like to use the DCU VISA 
card.  However, it does not make sense to us to pay $25 for this privilege 
when there are many other vendors that do not charge an annual fee.  

Enclosed please find our DCU VISA Gold Cards.  I would appreciate it if you 
would cancel our VISA account.  If our credit union changes the current policy 
of charging an annual fee, we will consider reapplying.


						Sincerely,



						Gary and Sarah Hicks
						405 England Place
						Marietta, GA   30066

The marketplace (in this case, financial services) has become
more competitive.  I think that the DCU needs to rethink it's goals and
objectives. I hope that any review by the BOD should include questions
regarding competitive offerings, etc.

Since I'm in New England, my comments are NE oriented:


1.  Let's look at ATM's 

                          DCU         BayBanks
                         
    Locations             <50         >1,200
                         
    Minimum balance       $10         $ 1,500
    for ATM usage       			 

    Though Baybank has a higher minimum, the number of ATM machines
    around make it the hand down winner.


2.  Let's look at Credit Cards (assuming card holder pays the full
    balance each month):

                          Citibank   Citibank
                     DCU  Advantage   FORD     Discover  GM    AT&T

     Annual Fee	     yes   $50*	      $20# 	non	 None  None

     Rebate	     non   1 FF mile   5%	<1%	  5%   Non


     * Citibank will waiver the fee if the card holder charges
       a "significant" amount each year.

     # Citibank FORD will rebate the annual fee with Car Purchase.
   
     Anyone planning on buying a GM card or Ford will probably swithc.

     It would be really interesting to survey the DCU BOD and 
     see which credit they use!


3.   Home Equity loans - this is one area that has really heated
     up in terms of competition:

                                                       #1        #2       #3
            DCU      DCU     BayBank  Fleet  WCIS    Andover   Andover	Andover
                                                               		
FIRST YEAR  Set by   PRIME    PRIME    5.9%   4.7%   PRIME      PRIME    PRIME
            BOD      +1.5%    +0%                     +0%        +1%      +0%
	    
           
After first  Set by  PRIME    PRIME    PRIME  PRIME  PRIME      PRIME    PRIME
      YEAR   BOD     +1.5%    +1.5%    +1.5%  +1.5%  +1.5%       +1%      +0%
                                                     

     Andover Bank has three options for its home equity lines.  Option #3
     is for home owners with no first mortgage. Their most popular choice
     is option #2 altough the number of home owners selecting option 3
     was much higher than expected.  I asked the DCU regarding option 3 on
     behalf of a colleague. The response (from the DCU) was that there
     is no difference in default risk between homeowners with and without
     a mortgage.  Andover Bank views it slightly differently.

     (As a side note, Andover Bank is a publicly held company; it's run
      by a bunch of young bankers - average age less than 40 with no
      pre-conceived ideas. It's so well managed that Fidelity Investments
      owns 9% of the outstanding shares.)   

     In my own case, I had a home equity loan where the rates were set by
     the BOD (pre-1989) and that rate at time was 9.5% vs 7.5% at other
     banks.  The only way to get a lower rate was to re-apply.  Since I
     had to go through the application process, I then looked around and
     found a much better deal.


Gim

>>  Ms. Etsell noted that the Annual Report is on schedule.  It will be
>>  delivered from the printer on April 15, 1993, and will be mailed out only
>>  to large depositors.

If I remember correctly, the only financial requirement for membership is a
$5 deposit.  All members with such a deposit are equal members of the
credit union, and are allowed one vote.  I thought that was the grass-roots, 
credit "union" concept.

If I, with my paltry $2000 in savings, do not get mailed an annual report,
why should anyone else?  Presumably any one could get one at the annual
meeting, or request one at their local branch office.

So what constitutes a "large depositor"?

Elaine

Re: .16

Thanks for the snide comment.  I was hoping to lure Phil back into the notes
file with an honest and direct question.  Now you've marked the note as one
he will be sure to avoid.

Elaine

    Why are Board Member Loans discussed at a Board Meeting?

RE: Note 676.19 by PATE::MACNEAL

>    Why are Board Member Loans discussed at a Board Meeting?

Because DEC does not have any Unisex restrooms.

RE: Note 676.19 by PATE::MACNEAL

>    Why are Board Member Loans discussed at a Board Meeting?
    
    I would assume this is done to make sure everything is on the up and
    up. One would not want to have a Board member getting special deals
    under the table. 
    
    			Alfred