NCUA’s proposed overdraft policy is part of the agency’s proactivity in adapting rules, regulations, and policies to ensure credit unions can meet evolving needs of their members, CUNA wrote Tuesday. 

Specifically, the proposal would remove the prescriptive 45-day limit for a member to cure each overdraft and replace with a requirement that the written policy establish a specific time limit that is both “reasonable and applicable to all members.”

The amended overdraft policy would still require the federal credit union to “establish a specific time limit” to cure the overdraft but it may exceed 45 days.

“The Overdraft Policy proposal is a perfect example of the agency’s ingenuity and we recommend the Board act quickly to implement the proposed change so that credit unions can amend their policies, as they deem appropriate, in the interest of assisting financially distressed members,” the letter reads.

CUNA also notes:

• Credit unions offer overdraft programs as a convenience and accommodation, and members that choose to opt in often do so for the peace-of-mind these services provide; and
• The proposal is consistent with 2005 interagency guidance on overdraft protection programs.

“As consumers affected by the pandemic struggle to make ends meet, the agency and other authorities should continue to encourage affected consumers to reach out and work with their local credit union to reduce or eliminate incurred fees or to consider other low-cost products and services,” the letter reads.