DES MOINES, Iowa (3/26/10)--Card portfolio managers at 95% of TMG's card-issuing credit unions have discontinued the authorization of overlimit credit card transactions, says TMG. TMG, a wholly owned subsidiary of the Affiliates Management Co. owned by Iowa credit unions and their members, said the other 5% of clients continuing to allow overlimit authorizations will do so without assessing a fee. TMG attributed the trend to proposed rules in the final portion of the Credit Card Responsibility, Accountability and Disclosure (CARD) Act. The rules would permit assessment of overlimit fees only on cardholders who agree to the fees. The proposal would become effective Aug. 22. "There's no doubt that some cardholders will miss the ability to spend over their limits," said Sara Petty, TMG vice president of strategic initiatives. "However, removing the temptation to overspend really makes sense for credit unions as they lead the country's efforts to return to thrift and financial responsibility," Petty added. Citing opt-in program costs among the reasons for eliminating the overlimit authorizations, TMG clients predict several challenges in the maintenance of two cardholder groups--those opting in and those opting out of overlimit fees. "To complicate matters, the two groups would be in constant flux, as cardholders maintain the ability to change their minds," Petty added. "If, for instance, a cardholder has opted in, he has the right to opt-out each time he receives a statement containing an overlimit fee." Also, credit unions offering fee-based overlimit services have been asked to present their fee models to the Federal Reserve Board in order to weigh in on the Fed's final rules regarding the reasonability of fees. "The complexities of defendable fee calculations make fee-based opt-in program compliance insurmountable for many card-issuing credit unions," Petty said. TMG's experiences mirrors the Credit Union National Association's (CUNA) belief that many credit unions will chose to either disallow the service or pay overlimit transactions without charging a fee, since the CARD Act requires the member to opt-in before such a fee can be charged. The burdens of doing so will not likely be worth the additional fees that may be collected, said CUNA.