‘The Right Thing to Do:’ Affinity Plus Drops NSF Fees
Courtesy of Affinity Plus

‘The Right Thing to Do:’ Affinity Plus Drops NSF Fees

The St. Paul-based credit union says it is eliminating non-sufficient funds fees and lowering overdraft costs.

Following in the footsteps of several big-name national banks, locally based Affinity Plus Federal Credit Union this week announced that it has eliminated non-sufficient funds fees.

Affinity, one of the largest credit unions in Minnesota, says it is the first credit union in the state to eliminate the fees, which are usually charged when an account owner lacks the money to pay for a transaction. The credit union has also cut its overdraft fees from $35 to $15.

But Affinity isn’t the first Minnesota financial institution to drop NSF fees; earlier this year, Minneapolis-based U.S. Bancorp joined a growing number of larger banks that have reduced or eliminated certain NSF fees.

Brian Volkmann, Affinity’s executive VP and CFO, said the credit union first started dropping some of its usual fees around the onset of Covid-19 in 2020. During the first couple months of the pandemic, Affinity dropped fees in about 50,000 instances, he said. “It got us thinking about fees in general,” Volkmann said. “What would be the impact if we were to do this in the long run?”

This year, Affinity’s management performed a full assessment of the credit union’s fees and presented it to the board in June. Affinity’s board then signed off on the plan to eliminate NSF fees and lower overdraft costs.

Volkmann said that the move may have a small temporary effect on Affinity’s business, but that in the long run, it will be “very positive” for the credit union’s members. The decision may also spur some individuals to join Affinity.

“We believe we’ll see new members from this,” Volkmann said. “We’ll see additional referrals from existing members. We believe the growth in membership and the engagement with existing members will help pay for any lost opportunity here.” He noted that fees comprise less than 10 percent of Affinity’s net income.

According to Affinity’s analysis, the moves are expected to return about $5 million in total back to members. In a news release, Affinity president and CEO Dave Larson said that the moves are “the right thing to do for all of our members.”

“Many national institutions are advertising the elimination of overdraft fees but are now returning items rather than paying them,” Larson said in the release. “What it means in reality is that the consumer could still receive a fee from the merchant, but with an added sting of that transaction not having been honored.”

Affinity’s leadership believe that fee restructuring will help protect its more “financially vulnerable” members.