Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CUNA Overdraft plans consistent with CU mission
WASHINGTON (8/5/09)—While a story in USA Today on Tuesday took issue with credit union overdraft protection programs, Credit Union National Association (CUNA) President/CEO Dan Mica explained that the programs are consistent with credit unions’ philosophy and mission to meet members’ financial needs and resolve short-term financial problems. Mica noted that, in the wake of the story, it is important for credit unions to communicate that overdraft programs are a way that mainstream lenders like credit unions can help consumers with a lower-cost option to such outlets as payday lenders and pawn shops. “Credit unions that charge fees for the programs do so in order to make the business model work on a service that a number of their members value and are willing to pay for,” Mica said, adding: “But the fact is, credit unions generally offer this service to save members the high cost and embarrassment of a bounced check." Typically, credit unions charge around $25 for an overdraft protection fee, while cumulative bounced check costs, including fees charged by merchants receiving the "bad" check, run as high as $50-$85 oer check. Both federal lawmakers and regulators are looking at financial institutions’ overdraft protections plans to determine is greater consumer protections are needed. For instance, in March Rep. Carolyn Maloney (D-N.Y.) asked her House colleagues to support a 2009 version of her earlier overdraft bill that failed to pass, the Consumer Overdraft Protection Fair Practices Act (H.R. 946). As CUNA has testified on Capitol Hill this year, CUNA staunchly backs intention to eliminate abusive practices associated with some bounce protection plans, but insists any law must create an equitable balance between those protections and the needs of service providers to be fairly compensated for the service and not subjected to unnecessary regulatory burdens.
Other Resources

RSS print
News Now LiveWire
July 's Fed Bank's "FedFocus" has some interesting articles: incl cost/benefits of $1 currency 2 coin conversion ttp://tinyurl.com/nybmnhh
1 Day ago
Do you wish you were a News Now subscriber? Go here: http://t.co/7evfBSjeMx
1 Day ago
Financial education for student body key part of Altura #creditunion, UC-Riverside partnership #NewsNow http://t.co/Xp6OJd66o6
1 Day ago
.@VTcreditunions gains 200 new FB followers in just 2 wks to reach 1,000 http://t.co/I89xJcv4Jg
1 Day ago
.@CUNA is testifying on reg relief Tues,July 15 at 2 p.m. be4 Hs Fin Serv Subc. Here is the agenda and witness list: http://t.co/yBRhlmdqHt
1 Day ago