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Digital bank eliminates overdraft fees, financial services company applies for charter
Ally Bank announced Wednesday that it has eliminated all overdraft fees for its customers, one week after Sen. Elizabeth Warren, D-Mass., remarked that federal regulators should be more aggressive in policing bank overdraft charges during a Senate Banking Committee hearing.
Additionally, Ameriprise Financial has filed an application for a state industrial bank charter, according to Yahoo Finance. Through the charter, Ameriprise Financial would be regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC).
The company is also filing an application to transition its personal trust services business to a limited purpose national trust bank regulated by the Office of the Comptroller of the Currency (OCC).
NAFCU has been leading efforts to ensure novel banks operate on a level playing field with credit unions and urging policymakers to make necessary changes to combat the risks posed to the financial system by novel banks.
Last week, NAFCU joined with several other financial services industry trades Thursday to reiterate concerns to the Office of the Comptroller of the Currency (OCC) about its novel bank licensing approach and urged the agency to withdraw a recent interpretive letter and reconsider three conditionally-approved trust charters.
Additionally, Carlos Pacheco, CEO of Premier Members Credit Union (Boulder, Colo.), last month testified on behalf of NAFCU before a House Financial Services subcommittee on chartering issues.
In addition to Pacheco's testimony, NAFCU has released a video, op-ed from President and CEO Dan Berger, and issue brief outlining potential chartering schemes, to inform consumers and lawmakers about the risks posed to the financial system by fintech banks. Berger also joined Fox Business Reporter Charlie Gasparino to discuss fintech concerns on The Claman Countdown.
NAFCU and the trades have consistently called on the OCC to provide a transparent charter process, including longer public comment periods on the applications to ensure proper oversight.
Last month, NAFCU President and CEO Dan Berger called on the NCUA to finalize its proposed rule to remove the 45-day limit in its requirements for an overdraft policy in the agency's lending rule, as it will allow federal credit unions "to streamline processes related to reviewing these accounts, establish reasonable repayment periods and lending processes related to these negative balances, and, most importantly, offer members who are struggling financially with flexibility and understanding as they work with them."
Under the existing overdraft policy, federal credit unions (FCUs) must adopt a 45-day maximum time limit for a member to either deposit funds or obtain an approved loan from the FCU to cover each overdraft.