May 16, 2019

CUs: How does overdraft rule impact operations?

Overdraft Reg AlertNAFCU sent a Regulatory Alert to member credit unions Wednesday requesting feedback on the overdraft rule as the CFPB reviews it under the Regulatory Flexibility Act (RFA). Prior to the Regulatory Alert, NAFCU's Carrie Hunt sent an email explaining what the bureau's request for information (RFI) means for the industry.

On Monday, the CFPB issued two RFIs: one on the overdraft rule and another on its plan for periodic review of rules under the RFA. In the Regulatory Alert focused on the overdraft rule, NAFCU explains the requirements of the rule and what information the CFPB would like to receive through the RFI.

As NAFCU gathers feedback to provide the CFPB on the rule, it asks credit unions:

  • what share of their membership currently opts-in to overdraft protection;
  • what services credit unions offer to improve member satisfaction with their overdraft program;
  • whether the overdraft rule should be rescinded, maintained or modified and why;
  • what challenges credit unions face under the overdraft rule and how compliance burdens could be reduced while still ensuring consumers are knowledgeable on overdraft programs;
  • if there are any developments in technology, market conditions or consumer behaviors the bureau should take into account;
  • in what circumstances do credit unions waive overdraft fees;
  • how the overdraft opt-in form could be improved; and
  • how changes to how transactions are ordered and processed for the purpose of paying overdrafts could impact credit union operations.

Member credit unions can submit feedback through NAFCU's Regulatory Alert until June 14; comments are due to the CFPB July 1.