Learn Marketing & Strategy Insights, You Will.

Tag: discussion

Solving the “Junk Fees” Issue with ChatGPT

What’s a “junk fee”? Simply put, it’s any charge beyond what you’ve agreed or expected to pay for a product or service. For a credit card, it can be a late fee. For debit, an overdraft or NSF fee. For a hotel, a “resort fee” slapped on the bill when you check out.

I didn’t come up with the phrase. That goes to the CFPB, or Senator Elizabeth Warren. Or a nameless intern with a knack for catchy terms.

Either way, it’s in the national discussion. The CFPB has an entire section dedicated to Junk Fees across a range of industries. They have things to say about overdraft fees, no doubt. I mean, we do agree on that.

President Biden Tweet About Junk Fees
POTUS attention

NAFCU took a different position, claiming that the current arrangement is fine and to let credit unions handle it. They’ll come up with the best strategy for their members and institution, as their press release explains.

So that’s one big topic. And the CFPB isn’t stopping at overdraft.

In early February 2023, they issued new guidance for credit card late fee structures. Naturally, the credit union industry had harsh words in response.

On a totally different topic, a certain conversational AI stole the spotlight, reaching 100 million users faster than any platform ever. ChatGPT single-handedly broke education, thought-leadership, and programming…or so the headlines would have you believe.

While it’s an amazing system, it’s also not going to steal everyone’s job, yet. However, it does open up an opportunity to have conversations which let us see different perspectives and expand our own critical thinking.

So as if I were assembling my first lightsaber, I elegantly smooshed (the Jedi term) these topics together.

Below is an unedited discussion on the “junk fees” topic between myself and ChatGPT, taking the role of a credit union executive and lobbyist who isn’t quite so keen on simply eliminating them.

Geek notes: You may notice it totally missed my point about CDFI (maybe I shouldn’t have written it out), but I do believe this is a direction worth pursuing. Reading through, I realize I should have asked for examples. Oh well, next time.

I was also surprised how it eventually started getting “persuaded” to my position, agreeing that junk fees should go, but not on how. I wonder…is this how a person may think, too?

Finally, I asked it to summarize it up in a way a geek would love. Here’s the gem we got:

“Together we can boldly go where no credit union has gone before, providing affordable and accessible financial services.”

ChatGPT

Image credits: DALL-E 2 AI image generator

Eliminating Junk Fees: A Human/AI Discussion

AI Chatting with Geek - DALL-E
No way I’m the “tall” one in this situation. Oh, am I the AI?

Joe

The concept of “junk fees” is in financial news regularly now. With the CFPB leading the charge against a range of punitive fee structures, it’s a matter of time before new rules go in place.

Even the President is in support of eliminating junk fees, as he posts about it often. As a member of the credit union community, I agree with this stance. The poorest members shouldn’t be the ones most impacted by the highest fees on a range of banking services.

Income can still be generated through value, rather than off those getting stuck with late payments and other charges.

Knowing my stance, take the position as a lifelong credit union executive and lobbyist who is against these policies.

They have a range of good arguments why these ideas are not beneficial for small credit unions, their members, or the industry as a whole (I don’t know what they are). With you roleplaying as that executive, let us engage in a reasoned discussion on the topic.

You go first and I will respond.

ChatGPT

As a credit union executive and lobbyist, I strongly believe that the concept of junk fees and the push to eliminate them is misguided and harmful to the credit union industry.

Small credit unions, in particular, rely on these fees as a source of revenue. Without them, we will have to resort to other measures to generate income, such as increasing interest rates, decreasing services, and even closing down branches. This will have a negative impact on our members, who will have fewer options and face higher costs.

Moreover, these junk fees are not inherently bad. They serve as a deterrent for late payments and other harmful financial practices. Without these fees, we risk encouraging irresponsible behavior that will harm both the credit union and its members.

Additionally, the proposed regulations are too broad and will harm the entire credit union industry. They will stifle innovation and growth, limit our ability to adapt to changing market conditions, and increase compliance costs.

In conclusion, the push to eliminate junk fees is misguided and harmful to the credit union industry and its members. We must resist this push and fight for a regulatory framework that allows us to continue serving our members effectively and efficiently.

Joe

I appreciate your position on the issue. On the point of small credit unions needing this fee revenue, I agree that we must find ways to help them remain viable in an ever more challenging financial world. And making sure they can continue to serve their members, often people with few or no other traditional banking options, is essential.

However, why are we immediately saying no to something which can help people, rather than using it as an opportunity to seek out new forms of revenue, enhancing how the credit union model works for their members and community?

This can be a springboard for innovation, not a new “write to your representative and say no” issue. I also agree that some fees make sense to discourage irresponsible financial behavior.

However, a number of large banks and even other credit unions have taken a no-fee approach, with negligible change in member practices.

Instead of using a stick, let’s devise a carrot to incentivize and empower healthier financial practices.

Then, we’re educating as well as assisting.

Whenever regulations are proposed, a standard refrain is that they are too broad and will stifle growth. To the contrary, such rules would only put limits on what isn’t allowed, not telling anyone you cannot innovate.

In fact, this should be taken as a golden ticket to put our thinking caps on and innovate our way out of the challenges faced. We can watch as new rules are implemented and confidently tell members and non-members, “credit unions don’t believe in such junk fees, and we work every day to help build our members and communities.

Financial wellness is at the core of our being, so while we may not always agree on the regulatory path, we will always be at the front of innovation for finding ways to provide banking opportunities to every American.

ChatGPT

I understand your perspective and I agree that seeking out new forms of revenue and enhancing the credit union model is important. However, the reality is that change doesn’t happen overnight, and the sudden elimination of junk fees could be devastating for some credit unions.

We need to be proactive in finding new sources of income, but it’s not something that can be done overnight without causing harm.

I also agree that we should focus on financial wellness and education for our members, and I commend the idea of incentivizing healthy financial practices. However, this needs to be done in a way that is sustainable for the credit union and its members, without relying on junk fees.

With regards to regulations, I do believe that too many regulations can stifle growth, especially for small credit unions that don’t have the resources to comply with them. The key is to find a balance between protecting consumers and allowing credit unions to serve their members effectively.

Ultimately, I believe that credit unions should strive to provide affordable and accessible financial services to their members. Junk fees may not be the ideal solution, but they are a reality for many credit unions, and eliminating them without a comprehensive plan for sustainability could have negative consequences.

We need to work together to find a better way to serve our members and communities while remaining financially viable.

Joe

Change does not happen overnight, which means we can find a compromise on the rule making as well. How would you feel about rules that take effect over a period of time, giving credit unions, especially smaller ones, opportunity to find those new sources of income?

We can also take a look at the Community Development Financial Institution program to see how it can play a role in assisting the transition for more highly affected credit unions.

In the meantime, members can benefit from reduced costs. This can also be supported by education campaigns for members to help them best understand how to avoid or reduce fees incurred.

At the same time, making fee structures clear can reduce expenses in collection and placement of them in the credit union. Financial wellness is a valuable part of the efforts, as we discussed and agreed upon.

However, you cannot educate everyone out of challenging financial situations.

Thus, we should look to larger social issues and ensure that credit unions have a leading role in helping address the impacts of socioeconomic pressures on affected populations.

Yes, we must find the balance for regulations to be effective in their goal and also not negatively impact credit unions. I believe we can do this while making sure credit unions are shining examples of affordable and accessible financial services.

Junk fees don’t have to be part of that future, even if it takes some time to get there.

ChatGPT

I absolutely agree with you on the importance of finding a compromise on the rule making, especially one that takes effect over time.

This would give credit unions, especially the smaller ones, an opportunity to adjust and find new sources of income. The Community Development Financial Institution program is definitely worth exploring as well.

In addition, the education campaigns are essential to help members better understand the fee structures and how to avoid or reduce fees incurred. Making fee structures clear can also reduce expenses in collection and placement of them in the credit union.

I also agree that credit unions should have a leading role in addressing the impacts of socioeconomic pressures on affected populations. Providing financial wellness and education to our members is important, but we must also recognize that many are facing larger social issues that impact their financial stability.

Overall, I believe that with cooperation and collaboration, we can find a balance between regulations that are effective in their goal and do not negatively impact credit unions.

Our goal should be to continue providing affordable and accessible financial services to all members, without relying on junk fees. We can work together to build a better future for credit unions and their members.

Joe

It appears we have more to agree about than disagree! I hope we can work together to deliver on the mission of “people helping people”, building financial wellness and empowerment for millions. While still ensuring credit unions can keep the lights on.

Thank you for engaging in this discussion.

ChatGPT

I completely agree. It’s always great to have a productive and respectful discussion, especially on an issue as important as this. I believe that by working together, we can deliver on the mission of “people helping people” and build a better future for credit unions and their members.

Thank you for taking the time to discuss this issue with me. Let’s keep this dialogue going and continue to work towards a solution that benefits everyone.

Creating a Buzz

If you’re a follower of the tech world (in 2014), it’s likely you have heard about the announcements by Amazon for an upcoming event. The press and interested party gathering will be held this Wednesday in Seattle, WA. Of course, whenever a company of their stature teases a release, the rumor mill goes into overdrive: A new phone, a flying car, manned mission to Neptune? Each story seems to get more outlandish.

However, they are talking…and you’ll be hard pressed to navigate a tech (or typical news) website without seeing “Amazon event” plastered throughout. There’s an air of mystery and excitement that is nearly palpable, and Amazon is not shy to embrace it. In fact, what they did earlier today nearly drove the reporters insane. Instead of the anticipated follow-up teaser for the event (for attendees), they mailed out a children’s book with a letter from Jeff Bezos, CEO of Amazon, explaining how it was his favorite book as a kid. While thanking registrants for their interest, he also described how being unique is a challenging, but important, endeavor (akin to the moral of the story).

Two days ago, the industry was positive Amazon would be releasing a 3D smartphone of some sort. Now, all they can talk about is the typeface and color scheme in his letter, and the intricacies of the story he attached. With one unexpected gesture, Amazon moved the conversation from specs to ideas.

Your members will always connect better with your culture and ideas than they will with “no-fee checking” or other specifications easily replicated at other institutions. Embrace that culture to create a buzz of your own. Just stay away from announcing a manned planetary mission; that’s probably a bit premature.

Image credit: Book/invite by <re/code>

CUs & Tech…An Opportunity?

What you do while procrastinating is what you should be doing for work.

I read that somewhere while procrastinating, and it rings completely true. My time-substituting vice? I spend a lot of time on technology sites. From space science to consumer electronics, I take it in en masse. In fact, it’s almost embarrassing how informed I am about the field. Almost. Yet this can be an opportunity for us all.

No, I’m not going to tell you what new smartphone you must use, or how marketing simply has to reference a recent discovery. There’s plenty of highly competent people you can refer for those debates.

Instead, we can use this information to find ways to remain at the “bleeding edge” (no blood will be spilled) and help find unique ways to best serve CU members. Better engagement strategies, more profit opportunities, and organizational planning regimes can be found in the most unrelated of topics.

What the heck am I talking about?

Ok, take the recent discovery of a rocky exoplanet that’s 17 times the mass of our beloved Earth. That’s really big when it comes to spinning rocks. In fact, it’s so big that scientists didn’t think it could exist. Our current understanding says it should have become a gas giant, like Neptune. But it didn’t.

Within your credit union, it tells us that thinking “too big” on an initiative can surprise everyone. We only expand our understanding (and belief) when we encounter something that redefines it. So, go big, go unique, even if a traditionalist says it cannot be done.

Like this blog. It’s probably one of the only CU/technology discussions of its kind. Is that bad? Good? Absolutely crazy?

Who is this for?

You! And the CIO; they’ll enjoy a different outlook in their language. And the CEO; they like being told what to do (just kidding!). And your marketing team; the great ones I’ve met are always keeping their eyes peeled for an opportunity to go wild.

Future posts will grow out of the news I read while I’m, um, working. And where will it go? Let’s find out!

Image credit: Astronomical clock by  PublicDomainPictures from Pixabay.

© 2024 Credit Union Geek

Theme by Anders NorenUp ↑