Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Dupont Community Credit Union2.78%-$25kGrow Green Checking Tier II
Dupont Community Credit Union1.27%-$25kGrow Green Checking Tier I
Accounts mentioned in this post. Rates as of August 22, 2014

Virginia Credit Union Increases Reward Checking Rate But There's a Catch

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Dupont Community Credit Union

DuPont Community Credit Union has been bucking the trend this year in interest rates. It has increased the rate of its reward checking account, Grow Green Checking, three times this year. Its first rate hike was in May. Its third rate hike was last week. However, this last rate hike included new requirements.

The new highest rate of the Grow Green Checking is 3.14% APY for balances up to $25,000 (as of 12/06/2011). This had been 2.89% APY before December. They increased the debit card usage requirements. It now requires 15 debit card purchases per month. Also, the total debit card purchases must be at least $250. If the old debit card usage requirements are met (10 purchases a month), the member qualifies for a lower rate, currently 1.87% APY for balances up to $25K. The credit union calls this Tier I and the higher rate Tier II. Both tiers require e-statements, but there are no direct deposit requirements. The rate for balances over $25K and when requirements are not met is 0.15%.

It's interesting to see another institution requiring a certain purchase amount. Most reward checking accounts are powered by BancVue, and they ensure their accounts comply with Regulation DD. According to this FDIC bulletin, "Banks may not require that transactions be of a certain dollar value (individually or in aggregate)."

Update 12/07/11: I received the following information from the credit union compliance officer: Although many consumer regulations apply equally to banks and credit unions (Reg Z – Truth in Lending, Reg E – Electronic Funds Transfers, Reg CC – Funds Availability), the NCUA has a separate and distinct Truth In Savings regulation, NCUA Part 707. This regulation is different from Regulation DD, which is the Truth In Savings regulation for banks. Perhaps the most fundamental difference (and the reason for a separate regulation) is that credit unions pay dividends on shares, whereas banks pay interest on deposits.

Credit union membership is open to those who live, work, worship or attend school in any of the following Virginia counties or cities: Augusta, Rockingham, Rockbridge, Highland, Bath, Shenandoah, Waynesboro, Staunton, Harrisonburg, Lexington and Buena Vista. Please refer to the credit union's membership page for more details.

DuPont Community Credit Union branches are located in several cities in the Western parts of Virginia.

The credit union has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 7.01% (excellent) based on June 2011 data. Please refer to my financial overview of DuPont Community Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 62474).

Finding the Best Reward Checking Account

If you're new to reward checking, my post on the common reward checking traits should be useful. To compare reward checking accounts based on interest rates and balance caps, you can use our reward checking rate table. Refer to this post for details on how to use the rate tables.


  Tags: Dupont Community Credit Union, checking account, Virginia

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Comments
4 Comments.
Comment #1 by darkdreamer4u posted on
darkdreamer4u
So how do they get away with this violation of Regulation DD?

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Comment #3 by tightwad posted on
tightwad
They are breaking no rules because they are still allowing card purchases of any amount. You just won't qualify for the high tier rate unless you spend a combined amount of $250 on atleast 15 uses.

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Comment #4 by Jason Clarke (anonymous) posted on
Jason Clarke
Also, please note that the FDIC bulletin referred to in the post only prohibits the conditioning the payment of any interest on transaction amounts.  In other words, DCCU's program could be adopted by any financial institution, as long as the FI continued to pay the base dividend/interest amount no matter the transactional activity.

To clarify tinkywinky's comment, credit unions are subject to Regulation D (Reserve Requirements), but not Regulation DD (Truth in Savings) - I think that was just a typo by tinkywinky.  The NCUA's Part 707 is substantially similar to Reg DD, but with differences that reflect the unique structure of credit unions.

Full disclosure - I am the Compliance Officer for DuPont Community Credit Union.  I appreciate the opportunity to discuss our product offering and its regulatory compliance components in this forum.

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