WASHINGTON -
A so-called mark-up, or drafting session, of the bill was postponed three weeks ago when its House sponsors were unable to gather enough votes to have it passed in the Financial Services Committee, but the committee is expected to try again in the coming weeks.
The proposal would require credit unions and banks to calculate annual percentage rates for such programs, commonly known as bounce protection, under the Truth In Savings Act, instead of the Truth In Lending Act, one NAFCU lobbyist working on the bill told the Credit Union Journal.
Credit union representatives worry that if the programs are brought under the lending laws, then fees charged would be calculated along with interest, and bounce protection offered by credit unions would likely exceed NCUA's 18% annual interest rate ceiling for all credit unions.
This would prevent credit unions from offering the popular program, currently offered by more than 2,000 credit unions.
In addition, instead of requiring credit unions and banks to obtain consumers explicit approval for bounce protection, the amendment would allow consumers to "opt-out" of the programs.
The bill is expected to be formally voted on by the House Financial Services Committee over the next few weeks.
The bill is a long shot, anyway, Even if it passes the Financial Services Committee because it will also have to pass the full House, and then go through the same process in the Senate, where bills are already backed up.
The Senate Banking Committee, where the bill would land if it gets past the House, is particularly backed up because its chairman, Chris Dodd, of Connecticut, has been absent while he is running for president.
