Have a comment or question? Send it to us. Here are some members' suggestions that have quickly resulted in changes or more complete information:
1. Flash graphic on Web site
2. Foreign currency exchange rate
3. All-in-one account signature card
Flash graphic on Web site
Members said: “I don’t like the Flash graphic on your home page. Can you remove it?"
Alabama Credit Union responded: For members who prefer no Flash files, we have created an alternate home page for our Web site. Please bookmark it at: http://www.alabamacu.com/index_noflash.html
Foreign currency exchange rate
Members said: "Why isn't Alabama Credit Union's foreign currency exchange rate the same as the exchange rates reported in national papers or Web sites? I deposited a check denominated in foreign currency and when I received credit to my account, it wasn't the exchange value I expected."
Alabama Credit Union responded: Alabama Credit Union does not set an exchange rate. Instead, we process foreign currency exchange items as follows: We send to Corporate America Credit Union, which sends it to U.S. Central Credit Union (the national clearing house for credit union drafts.) If the item is not denominated in U.S. dollars, U.S. Central Credit Union sends the item as a "Collection Item" to the foreign bank upon which it was drawn. That foreign bank pays the item, based upon its own exchange rate on a date it determines for final payment. Such payment as determined by the foreign bank using their own exchange rate is credited to U.S. Central Credit Union for the benefit of Corporate America Credit Union, which credits Alabama Credit Union for the benefit of your account. None of the U.S. institutions were involved in the determination of the exchange rate.
The rate of exchange is set by the paying bank. The foreign bank likely uses a rate which is the same or similar to the rate they post for lobby transactions as if someone came into the bank requesting to convert Euros into U.S. dollars. You should understand that you do not receive the median of the ‘bid and ask’ exchange rate as shown on published currency "spot markets" when you exchange money in a small consumer transaction. The spot market is a wholesale market, and a consumer, such as yourself, is not a large commercial trader of currency. You are involved in a consumer transaction. Each exchanger of monies sets their own rates. For example, on a given date, a large regional bank stated it would pay $5,795.00 for 5,000 Euros in a consumer transaction. The close on the "spot market" on the same date would create a transaction equal to $6,279.85. Of course to buy on the "spot market" you would have paid a commission to the broker. This is why the large regional bank has a different exchange rate. If they were to convert all of their Euros into dollars, they would then have to pay a commission to someone.
The following are excerpts from Bank Of America’s Web site (June 29, 2006), and speak to the issue you have inquired about:
- “Why are the rates in newspapers different than Bank of America Foreign Currency rates? Foreign exchange rates in the newspaper and on some other currency conversion sites are generally wholesale rates that are available to banks and are for transactions of U.S. $1,000,000 or more. These rates are generally not available to retail customers who are purchasing foreign currency for overseas trips. Bank of America Foreign Currency rates are competitive with other retail foreign exchange institutions.”
- “Where do Bank of America Foreign Currency exchange rates come from? Bank of America determines its foreign currency exchange rates based upon market conditions. Exchange rates for retail transactions are not the same as exchange rates for large foreign currency transactions among banks, as reported in The Wall Street Journal or elsewhere. In addition, exchange rates offered by other dealers, or shown at other sources (including online sources) may be different from Bank of America's rates.”
In some cases, the surcharge rate which was charged by the financial institutions involved (not Alabama Credit Union) might amount to some 3% of the transaction. Alabama Credit Union’s own fee is a nominal $3.00. We believe this fee to be substantially less than you would pay had you conducted the transaction with another financial institution in the area.
All-in-one account signature card
Members said: “Why do I always have to get new signature cards signed every time my CD rolls over or I set up a new sub-account (suffix)?"
Alabama Credit Union responded: We're developing an all-in-one account signature card that gives members the option of having the same owners and payable-on-death beneficiaries on each of the sub-accounts ("suffixes") attached to a member account number. This would eliminate the repetitive task of signing new account cards each time a certificate of deposit (CD) renews or when a new sub-account is opened (for example, a special savings account, or a Daily Money Market account, etc.) We'll have it available for use soon in all branches.
The other option that remains available is for a separate set of joint owners on each suffix, requiring a separate account signature card to be completed and signed for each sub-account or whenever a CD renews.
Watch for news about this new option; it's coming soon. (Posted Sept. 1, 2006)
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