Harper touches on overdraft in prepared remarks at REACH

October 27, 2023

As NCUA Board Chair Todd Harper touched on overdraft and non-sufficient funds (NSF) products during his speech at the California and Nevada Credit Union Leagues’ REACH 2023 conference, the Leagues are reminding credit union leaders that his remarks were prepared beforehand — which is not unusual for the chairman’s public appearances.

It’s important to note that Harper’s opinions and comments during his speech are entirely his own and do not necessarily reflect the official position of the Leagues.

A large focus of his prepared remarks centered on overdraft and NSF fees. He referenced credit unions’ mission to help member-household finances, overdraft/NSF fees falling disproportionately on underserved communities, some credit unions’ “overreliance” on overdraft/NSF fees, concentration and risk issues, banks’ restructuring of overdraft/NSF fee products, and large credit unions’ activity in this space compared to banks.

To that end, he asked credit unions to “meet the challenge of… rethinking overdraft and NSF fee programs,” and to “apply creativity and ingenuity when shaping the prospects of your institution and members.” He encouraged credit unions to envision rebuilding their overdraft/NSF programs.

The Leagues and CUNA have been publicly responding and addressing concerns within the state and federal political spheres on overdraft/NSF services.


The Leagues believe this a very myopic viewpoint and does not paint the entire picture for a credit union’s comprehensive service for its membership.

  • As not-for-profit organizations, credit unions operate to benefit their members rather than make a profit for shareholders. Credit unions are focused on providing lower loan rates, higher deposit rates, and products and services that meet the needs of their members.
  • Solely focusing on the financial impact of one aspect of credit union operations undermines a broader ecosystem providing exceptional member value.
  • Members benefit from these programs, which may help them through a cash shortfall. Chairman Harper’s proposal can have serious consequences and may require the consumer to seek out payday lenders to obtain money for essential purchases.
  • Because credit unions are owned by their members, they have traditionally worked hard to minimize fees on products and services — particularly for those of modest means — and offer opportunities for financial education and empowerment. Credit unions exist for the financial benefit of their member-owners, but they are ultimately driven by the philosophy of “people helping people.”

CUNA and the Leagues would like the NCUA to be cognizant of the fact that excessive requirements have the potential to divert credit unions’ resources and attention away from their primary mission — to meet their members’ financial needs.

Going forward, the Leagues know this remains a hot topic with some lawmakers and regulators in Sacramento and Washington, D.C. and look forward to working with the NCUA chairman and other regulatory policymakers and legislators on the perception of overdraft and NSF fees, giving credit unions a voice in the national discussion.