Industry Update: Two Credit Unions Pay Out Member Dividends, Banks Accused of Wrongdoing

At banks, the investors are the bosses. If the bank doesn’t make money, the investors suffer. If the bank makes money, so do investors. At credit unions, YOU are the boss. You reap the rewards of well-managed credit unions. 

To highlight this transformative power of credit unions, we will continually be sharing stories that prove how—to put it plainly—banks work for their investors, while credit unions work for their members. 

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Sen. Reed Accuses Big Banks of Gouging Customers 

Nov. 7, 2022 

Accusing the largest banks of using high interest rates to help their investors, Sen. Jack Reed, D-R.I., wants to know why bankers are increasing interest rates on loans, but not on savings accounts. 

“Soaring interest rates are hitting Americans hard. Customers are paying more and more for loans,” Reed wrote, in a letter to seven of the largest banks this week. “It appears the biggest banks are exploiting the higher interest rate environment to benefit their executives and shareholders, not the ordinary Americans whose deposits provide the funding necessary for those banks to operate.” 

Credit union trade groups have long argued that while for-profit banks are designed to reward investors, credit unions are member-owned and use their funds to benefit members. 

 

ORNL FCU Pays Owner-Members Dividend 

Oct. 28, 2022 

ORNL Federal Credit Union in Tennessee announced that its board approved a $5 million special dividend for its member-owners. This was the fifth year in a row that a special dividend was returned to members. 

More than 124,000 members received the special dividend; the average payment equaled $39.00. 

“ORNL Federal Credit Union continued to experience strong results in 2022,” said Randy Gorman, chair of the ORNL FCU Board. “We are thankful to our members for trusting us as their financial partner and for continuing to make ORNL FCU a thriving organization.” 

 

Dupaco Community Credit Union Pays Bonus Dividend 

Oct. 20, 2022

Dupaco Community Credit Union in Iowa announced that its member-owners received a share of nearly $3.7 million in bonus patronage dividends for 2022. 

The special payment to members occurred on International Credit Union Day; the average dividend was $50. It marked the seventh consecutive year the credit union paid a dividend to its member-owners. 

“Dupaco is more than local,” said credit union Chief Marketing Officer David Klavitter. “It’s a financial cooperative, owned by people in our community. The more members use their credit union, the more members, the community and Dupaco benefit.” 

 

Regions Bank Ordered to Pay $191 Million for Illegal Surprise Overdraft Fees

Sept. 28, 2022 

The CFPB ordered Regions Bank to refund at least $141 million to customers harmed by illegal surprise overdraft fees. The bank was further ordered to pay an additional $50 million into the CFPB’s victims relief fund. 

The agency said that Regions charged overdraft fees even after telling customers they had sufficient funds in their accounts. 

“Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it,” CFPB Director Rohit Chopra said, in announcing the penalty.