Removing Barriers Blog

CUNA Letter to CFPB Pre-Rule on Overdraft Protection
Posted June 03,2015 by CUNA Advocacy

CUNA sent the CFPB a letter in regards to their pre-rule efforts on overdraft protection and the order they issued to collect data from the top three core processors. We explained that consumers value overdraft protection and appreciate the service. Many credit union members are saved from embarrassment at the point of sale from overdraft protection and derive other benefits as well. We urged the CFPB to do more research on the issue in order to more fully understand the range of overdraft programs in the marketplace. Like every other service that credit unions provide, credit union overdraft protection should be considered carefully and separately from programs at other financial institutions.

CFPB’s November 2014 Order to major credit union service providers has caused them to incur costs which will be passed to credit unions and credit union members. It has the potential to impose yet another unplanned cost burden on credit unions, who unfortunately are already being forced to divert time and resources towards matters other than serving their members.

We urged the CFPB to reconsider and conduct more research, because, after all, a dollar spent on complying with an unnecessary regulation is a dollar that is not used to benefit credit union members.