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Column: It’s time to rethink banking

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By Michael Miller, CEO/Treasurer, Alco Federal Credit Union

Two local towns are losing their brick-and-mortar banks. Are other part-time branches soon to follow? Residents of Andover and Angelica have recently learned that their local branches of Community Bank will be closing. Local business owners and community members are dismayed and many are asking the question: what’s next?

Maybe it’s time to completely revisit how we bank and who we do business with. Maybe it’s time for us to be the owners of the financial institutions who serve us and not just customers. Thankfully there is already a model for these type of financial institutions – the credit union. A credit union is a type of financial institution that is non-profit as a 501-c1 and is beholden to its membership, not its shareholders like the bank model is.

I am the CEO and Treasurer of Alco Federal Credit Union and want to invite those who are disenfranchised and disinterested in the old way of banking to come see the credit union difference. Both of those branches that are closing have nearby branches of Alco in Wellsville and Belmont. Along with those two branches there are two others nearby in Friendship and Cuba. Each of the branches have drive up ATMs and teller windows. The ATMs are accessible 24 hours a day and the debit network is a shared network that offers over 30,000 ATMs surcharge free across the country.

One of the benefits of only having to answer to our members and auditors is that Alco can offer rates that just don’t seem to make sense sometimes (in a good way). With the Fed raising rates recently our Board of Directors, who are all elected by our members and members themselves, voted to raise our deposit rates. We expected to see others follow suit and pass on some of those increasing rates. To our surprise, very few changes were made on the deposit side. What did change? Their loan rates. While Alco’s Board decided to leave our low loan rates alone and increase the deposit rates, the banks were raising their loan rates and leaving their deposit rates low. That’s completely backwards to what is good for a local community.

Rates aren’t the only difference. Banking fees are notoriously high and plentiful. The list of ‘services’ that banks charge for you to use your own money is longer than a pharmacy receipt. Just one example that really shines the light on the problem is the overdraft fee. Some local banks charge over $40 for an overdraft fee. Alco charges $25. Many times, there are multiple overdraft fees that hit all at once. Just imagine if you go to fill up on gas, go inside to buy a snack for the kids, and then go pick up a prescription. You could be charged 3 times if they all get over drafted. You would pay $45 more in fees than you would by being a member and an owner of Alco Federal Credit Union. While many of our resident’s struggle to make ends meet, we can’t continue to overcharge them for banking access and pass that onto shareholders instead of keeping our hard-earned dollars working locally. That $45 in extra fees will most likely go right back into a local small business.

One of the best parts of being a member is that you can talk directly with management any time you need. Where does your local bank have their headquarters? Can you drive there and talk with the CEO? Many local banks are headquartered near Syracuse or Mansfield. Alco is headquartered right here in Wellsville and has been bringing these savings to it’s 6,000 plus members since 1953. Visit us online at www.alcofcu.com or better yet stop by and visit me at my office here in Wellsville.

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