The fed issued the proposal in January 2009 and compliance won’t be required until July 1, 2010.
As the compliance date nears and members receive notices, they may have questions about the rule. The Credit Union National Association advises credit unions to use these talking points about overdraft protection programs:
* They protect membersfrom the cost and embarrassment of bouncing a check or multiple checks. Most merchants charge a nonsufficient funds (NSF) fee of $30 per check on top of the financial institution’s NSF fee.
* Overdraft protection is a convenient service, which is why many members choose it over options such as overdraft transfers from other accounts or lines of credit.
* Credit unions have a long history of providing member education and financial counseling services. Many credit unions employ these efforts as key components of their overdraft programs.
* Overdraft programs are one method mainstream lenders such as credit unions use to keep consumers out of the hands of payday lenders and pawn shops.
* Credit unions that charge fees for overdraft protection do so to make the business model work on a service that many members value and are willing to pay for. In fact, credit unions typically charge less than other financial institutions offering similar services. The average overdraft fee at a credit union is $25, considerably less than the $35 average fee at the nation’s big banks.