The New York Times, October 15, 2018: Marriott workers struggle to pay bills, and credit union fees
Working as a dishwasher at the Philadelphia Marriott Downtown, Amos Troyah made about $30,000 in a recent 12-month period. Roughly $2,000 of it was spent on an especially frequent expense: fees on his checking and savings accounts at the Marriott Employees’ Federal Credit Union.
The fees came in increments like $6 and $10 — minimum-balance fees, excess-transaction fees, automatic money-transfer fees. On occasion, they were joined by that pooh-bah of personal finance charges, the overdraft fee, at a hefty $35.
Thousands of Marriott workers around the country are on strike, complaining that stagnant wages and unsteady hours have made it difficult to stay afloat. At a time when they are under particular pressure, the credit union may be adding to their struggles. Other employees said Mr. Troyah’s experience with fees was common.
The Marriott workers’ experience is a stark example of trends that are increasingly bearing down on the nearly 100 million people nationwide who have credit union accounts.
This philosophy largely persisted into the 1990s, even as credit unions grew larger and hired professional managers. “You had this relationship with people you were serving that you never lost track of,” said Randy Chambers, the president of Self-Help Credit Union in North Carolina, which has merged with a handful of smaller credit unions across the state.
Some credit unions still see their mission in such terms. But in recent decades, many have subtly shifted their approach. As falling interest rates made loans less lucrative, credit unions largely turned to fees to help replace the lost income. Over the past quarter-century, the average value of the fees collected for every dollar of interest income has risen to nearly 17 cents, from just under 7 cents.
But even against this backdrop, Marriott is an outlier. It takes in 52 cents in fees for every dollar of interest income.
As a result, some Marriott workers find themselves in a kind of financial double jeopardy: Low pay from Marriott keeps their account balances minimal, and those modest balances lead to more fees, crimping their assets further.
By contrast, more affluent workers, including some executives at Marriott, appear to benefit at little cost from the credit union, securing favorable interest rates on car loans and mortgages while largely avoiding heavy fees.
