In an effort to stem oversight efforts that would curtail overdraft programs from lenders, the National Association of Federal Credit Unions (NAFCU) has urged that the Consumer Financial Protection Bureau stop its intent to roll back those offerings.
In a letter to CFPB Director Richard Cordray, NAFCU’s executive vice president and general counsel, Carrie Hunt, wrote that the very future of overdraft protections could be in jeopardy. In the letter, Hunt wrote: “As member-owned, not-for-profit cooperatives, credit unions consistently strive to provide their members with financial products and services designed to help each member achieve their individual financial needs and goals.”
“To that end,” she continued, “credit unions have a vested interest in educating their member-owners on overdraft terms and conditions, in addition to working closely with those members to resolve any disputes or concerns.”
The executive went on in her letter to state several NAFCU findings from a late 2015 economic and credit union survey, which show that credit unions are conscientious when administering the overdraft programs and act in “good faith.” According to NAFCU, members of the credit unions themselves value having overdraft protection. And with credit unions, even those that offer traditional overdraft programs, about 93 percent offer alternative payment products — among them, most commonly, are overdraft lines of credit, at roughly 84 percent. That’s followed by linked money market accounts and then smaller loans.
That aforementioned data should be taken into consideration by the CFPB, said Hunt, who added in her letter: “Credit unions are unique, and their track record as good actors within the financial services industry proves they should not be grouped together with entities that the bureau seeks to restrict.”