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.