Newsroom
Eliminating overdraft programs would hurt consumers, says Thaler
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection ahead of its hearing today to examine overdraft fees, sharing the association’s support for a fair, transparent, and competitive market for consumer financial services, but cautioning that increased scrutiny or legislative efforts to eliminate overdraft protection programs are likely to result in significant negative impacts on borrowers and credit unions.
“It is inappropriate to intervene in market forces that are already leading many credit unions and other financial institutions to reduce, limit, or eliminate overdraft and non-sufficient funds (NSF) fees,” wrote Thaler.
Reiterating the opt-in nature of overdraft fees set forth by the CFPB, Thaler noted that credit union members who benefit from courtesy pay or overdraft protection programs do so willingly and with full disclosure of the program’s costs and features. The opt-in feature for debit and ATM overdrafts has given consumers “more control over the overdraft rule’s notice requirements and helped consumers to better understand the cost of overdraft programs,” added Thaler.
Former Committee Chairman Barney Frank, D-Mass., previously recognized the importance of an opt-in system and how consumer choice should supersede legislation around overdraft programs stating at a 2009 hearing that we wouldn’t “be in a situation where we are talking about legislation if you would have had an opt-in regime from the beginning.”
NAFCU urged Congress to keep the following in mind when examining overdraft fees:
- surveys done by credit unions of their members have shown they positively value the safeguards these programs provide;
- according to NAFCU surveys, a vast majority of credit unions reported offering specialized intervention and financial education for frequent courtesy pay program users to ensure they are not overly reliant on these programs;
- many credit unions already do not assess fees when an account is overdrawn by a de minimis amount; and
- a majority of credit unions reported routinely waiving fees when a member incurred the overdraft on accident and requested a fee waiver.
In addition, NAFCU joined CUNA on a separate letter to the committee, expressing that hastily enforcing legislation to limit overdraft protection could disrupt members’ ability to utilize such programs to resolve short-term financial difficulties. The groups reiterated that many credit unions and banks have offered innovative ways to provide overdraft services that are fair and transparent to consumer needs.
Read Thaler’s full letter. NAFCU continues to work with Congress and the CFPB to ensure credit unions and their members retain the right to use overdraft protection programs.
Share This
Related Resources
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 ChatGPT: What AI can do for you! ChatGPT has been created with one main objective – to predict the next word in a sentence, based on what's typically happened in the gigabytes of text data that it's been trained on. Did you ever hear of the saying, “People fear the unknown?” Artificial intelligence scares people, but it is the future, and you need to understand the tools and resources it offers. It’s also about saving time, that’s what technology and in this case, artificial intelligence can do for you. If you want to save time and have a better quality of life, this training is for you. Once you give ChatGPT a question or prompt, it passes through the AI model and the chatbot produces a response based on the information you've given and how that fits into its vast amount of training data. It's during this training that ChatGPT has learned what word, or sequence of words, typically follows the last one in a given context. During this webinar, ChatGPT: What AI can do for you, you’ll discover the background, purpose, usability, and the pros and cons. Don't miss this opportunity! Key Takeaways Learn the background of AI Understand the purpose of AI Identify the pros and cons Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 25, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCRMs Risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
ChatGPT: What AI can do for you!
Credits: NCRM
Webinar
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 Unifying Two Different Executive Benefits Programs About the Webinar In part one we discussed how to retain key positions during a time of transition. In part two, we will look at how to combine executive benefits programs from two different organizations into a single high-performing program. Evaluating each program includes many different facets, from strategy and expense to performance and servicing. This session will provide important considerations, whether or not you have pending M&A activity. Key Takeaways: Is the plan design both retentive and efficient? Is the benefit expense properly mitigated? Does the legal agreement reflect the board’s intent? View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Unifying Two Different Executive Benefits Programs
preferred partner
Gallagher
Webinar
Add to Calendar 2024-04-24 14:00:00 2024-04-24 14:00:00 Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage About The Webinar Join us to learn more about network lending, a cooperative model allowing credit unions to optimize liquidity and achieve loan growth. Discover how credit unions can participate in loan pools with other institutions, allowing them to diversify portfolios, access loans with potentially lower risk and higher yields, and expand lending capacity without necessarily needing a surge in deposits. Delve into how credit unions can pool their resources, set common underwriting and pricing standards, and collectively originate, buy, and sell loans to optimize liquidity management. Hear from your peers about best practices, case studies, and practical strategies to harness the full potential of network lending and how it's helped their credit unions. Don't miss this valuable opportunity to learn how to strengthen your credit union's position in today’s competitive environment. Key Takeaways: How network lending differs from traditional lending The benefits of participating in loan pools with other credit unions How credit unions can set common underwriting and pricing standards and collectively originate, buy and sell loans to optimize liquidity management Why network lending is critical to loan growth Watch On-Demand Web NAFCU digital@nafcu.org America/New_York public
Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage
preferred partner
LendKey
Webinar
Add to Calendar 2024-04-23 14:00:00 2024-04-23 14:00:00 Monitoring the Latest Litigation Risks Credit unions’ operations pose litigation risks, with more of these cases being filed as class action lawsuits. In this Monitoring the Latest Litigation Risks for Credit Unions webinar, you’ll review some of the specific kinds of lawsuits impacting credit unions and what potential claims could be on the horizon. You’ll also examine some options for mitigating risks. Key Takeaways Review the current lawsuit trends. Understand the potential claims risks Explore options for mitigating risks. Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 23, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCCOs NCRMs Compliance and risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar NCCOs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
Monitoring the Latest Litigation Risks
Credits: NCCO, NCRM
Webinar
Get daily updates.
Subscribe to NAFCU today.