Newsroom
NAFCU to HFSC: Overdraft Protection Act could be problematic for consumers
UPDATED: The markup has been postponed.
NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the House Financial Services Committee prior to its markup today, where the Committee will discuss the NAFCU-opposed Overdraft Protection Act, which would significantly limit overdraft protection programs and the ability to assess (NSF) nonsufficient fund fees. The association supports a fair, transparent, and competitive market for consumer financial services, but has previously cautioned that legislative efforts to eliminate or limit overdraft protection programs would likely result in significant negative impacts on borrowers and credit unions.
Regarding NAFCU’s opposition for the Overdraft Protection Act, Thaler highlights the association’s main concern with new restrictions and the failure to recognize the “opt-in” feature many overdraft products have today.
Thaler noted that many overdraft protection services are now “opt-in,” writing “Rules for overdraft programs, originally issued by the Federal Reserve and now under the purview of the Consumer Financial Protection Bureau (CFPB), made many services something that consumers must opt-in to. This opt-in requirement gives consumers control and the overdraft rule’s notice requirements have helped consumers to better understand the cost of overdraft programs.”’
In addition, Thaler turns lawmakers’ attention to recent data on the topic, urging lawmakers to keep in mind that:
- credit union surveys of their members done by credit unions of their members have shown that they highly value the protection and peace of mind courtesy pay programs provide and the assurance that their transaction will go through at the point of sale;
- NAFCU surveys have found that a vast majority of credit unions report offering specialized intervention and financial education for those who frequently use courtesy pay programs, to ensure that consumers are not overly reliant on these programs and are able to improve their financial health;
- many credit unions do not assess fees when an account is overdrawn by a de minimis amount and some place caps on the total number of NSF fees that can accumulate in a given period; and
- a majority of credit unions also report that they routinely waive fees when a member incurred the overdraft on accident and requests a fee waiver.
In the letter, Thaler also addresses NAFCU’s ongoing support for the Close the Industrial Loan Company (ILC) Loophole Act, bipartisan legislation introduced by Reps. Chuy Garcia, D-Ill., and Lance Gooden, R-Texas. This legislation would help stop ILCs from taking advantage of the current ILC charter that helps them gain more access to the U.S. financial system. The association also joined a coalition letter to the Committee from various financial organizations and consumer groups in support of the bill.
Read NAFCU’s full letter. NAFCU will monitor the markup and continue to advocate for the credit union industry.
Share This
Related Resources
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
Resiliency In Your Incident Response Plan
Cybersecurity
preferred partner
DefenseStorm
Blog Post
The Bottom Line on Insurance Tracking and Collateral Protection
Strategy
preferred partner
Allied Solutions
Blog Post
Add to Calendar 2024-04-15 09:00:00 2024-04-15 09:00:00 Mergers and Acquisitions: Unifying Two Different Executive Total Compensation and Benefits Programs Listen On: Key Takeaways: [03:50] With the merger of a smaller credit union into a larger one you are really only dealing with integrating staff into the larger credit union. [05:53] When working with a merger of equals we start with a deep dive into the executive compensation and benefits of each organization. [09:09] If your current executive benefits provider doesn’t conduct regular plan evaluations, consider having a plan audit anyway. [13:46] Don’t overpay for these things if you don’t have to. When you have more options available that means the cost is more appropriate. [17:11] It is in a unified organization’s best interest to do tier timelines where we look at your top executives who are critical to the unified organization’s success today and then slowly add in the next levels. Web NAFCU digital@nafcu.org America/New_York public
Mergers and Acquisitions: Unifying Two Different Executive Total Compensation and Benefits Programs
preferred partner
Gallagher
Podcast
Get daily updates.
Subscribe to NAFCU today.