WASHINGTON (6/4/15)--As the Consumer Financial Protection Bureau (CFPB) considers the next steps it might take regarding overdraft programs, CUNA urges the regulator to consider both the value consumers place on the programs as a convenience and the costs to credit unions associated with providing the service.
In a June 3 letter, CUNA encouraged the bureau to continue its study of overdraft protection plans. Through such study, CUNA said, the CFPB will gain a better understanding of the benefits consumers derive from the products, as well as see the differences between overdraft products offered by credit unions and other financial institutions.
Further, CUNA President/CEO Jim Nussle urged the bureau to recognize that there are costs to the services that credit unions offer, including overdraft protection. "It is reasonable for credit unions to assess appropriate fees for such services, particularly in light of the fact that at a credit union, costs incurred by the institution are borne by its members," Nussle wrote.
The CUNA letter also expresses deep concern regarding a CFPB order sent to major credit union service providers seeking information on overdraft programs. The order has caused the organizations to incur costs which, in the case of Fiserv, could potentially be passed onto credit unions and ultimately onto members.
The CFPB order may ultimately, Nussle warned, 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."
"Every dollar a credit union spends on issues related to unnecessary regulation is a dollar that is not used for the benefit of its members."
CUNA continues to carefully monitor this situation and inform the CFPB and members of the U.S. Congress on the distinctions between overdraft products offered by credit unions as compared with other financial institutions.