FCUs Can't Overdraw Accounts To Pay LoanArrearages

Register now

ALEXANDRIA, Va. - (08/04/04) -- Federal credit unions are prohibitedfrom overdrawing a member's regular share or share draft account tocredit the member's overdue loan payments, NCUA said in a new legalopinion letter that the FCU Act and the agency's own regulations donot allow a federal credit union to overdraw an account, unlessthere is a prior agreement between the member and the creditunion.

For reprint and licensing requests for this article, click here.