CUNA Seeks Carve-Out in Overdraft Protection Bill

WASHINGTON – CUNA was working with key lawmakers yesterday to limit the potential effects of a bill that would bring overdraft protection fees under the Truth In Lending Act, thereby counting the fees in the interest rate. CUNA lobbyists were working with members of the House Financial Services Committee to get the bill amended so the newly computed interest rate on overdraft protection would not violate the 18% ceiling set by NCUA. The Committee put off a vote on the bill until next week because of other pressing business. Both CUNA and NAFCU insist the bill’s provisions, which also include a requirement that members opt-in to the service, could force thousands of credit unions to scrap overdraft protection programs. Their pleas come as the credit union-backed Center for Responsible Lending is supporting Congressional efforts to reign in overdraft protection, which they say has become a big profit center for both credit unions and banks.