Monday, March 4, 2013


Does an aggressive promotion of skip-a-payment embody a core credit union principle of of promoting thrift?

In the opinion of one credit union CEO, it does not.

According to Bruen's Credit Union Blog, the "aggressive promotion and encouragement to use this program goes against the credit union grain. Skipping payments is hardly a good practice for any member since it keeps them in debit that much longer."

Chuck Bruen, the CEO of First Entertainment Credit Union in California, was reacting to a story about a 400 percent increase in skip-a-payment fees at Alabama's largest credit union, Redstone FCU.

Read the blog post.


  1. Good for Mr. Bruen, he's honest.
    The skip a pay would be impressive if there was no fee.
    Believe this is largely military personnel. Why not let them skip a pay for holiday shopping ... Because they serve our country?
    And, if they're not military, why not?
    Here is why.
    Credit unions in large numbers have moved from quaint little cooperatives to become very bank like.
    Many do not serve the undeserved - they fee them.

  2. I am a former CU employee and I can tell you that the argument from the CU would be that a healthy CU is good for the members. In this circumstance I did not think it rang true. Also I have read enjoyed your blog for years. Do not always agree but a great blog.

  3. Skip a payment is good for the member. It provides them relief. Whether the credit union charges a fee is no concern as long as the member is aware of everything. The member knows about the fee, they know about the extension of term. They should know everything about the conditions then they must make the decision to apply for a skip-a-payment or not. It is up to the consumer NOT others making decisions of what is good or bad for them. The old message of “Skipping payments is hardly a good practice for any member since it keeps them in debit that much longer" does not explain it very well. How much longer is the term and is the member aware of it. It appears to me that when a credit union charges a fee, it is considered bad.
    When you refinance a loan for the member it may put them in debt longer. Is this good or bad? The member wants it and needs it. You may charge a fee and maybe even a higher rate. Overdraft courtesy pay, if the member elects it, will be connected to a fee, the member has opted in and has accepted the fee for the service.
    We need to let people think and make decisions for their self as long as everything is disclosed properly.
    It appears that because this credit union made a lot of income from fees associated from this type of transaction it rubbed some the wrong way. Perhaps they are jealous.



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.