WASHINGTON-CUNA does not foresee signficant harm coming to credit unions as the result of lawsuits and potential lawsuits against overdraft programs.
CUNA spokesperson Pat Keefe said the trade association is aware of the efforts by classaction.org and the lawsuit filed by Cuthbert Shillingford against the El Segundo, Calif.-based Xceed Financial FCU.
"We are telling credit unions that their carefully structured and managed overdraft programs, which comply with the law, including appropriate disclosures of fees and check clearance policies, are of course legal to offer," said Keefe. "CUNA additionally urges credit unions to offer this and all products in a manner which promotes thrift for 'provident and productive purposes,' the mission of credit unions."
Keefe said CUNA has been closely following the overdraft litigation against the big banks. "Nothing we have seen, so far, in any of the suits gives us concern about what we know that credit unions are doing. Of course, we don't monitor every credit union's actions.
"From what CUNA has observed regarding the efforts by classaction.org, there is much discussion of "state and regional banks. That doesn't seem to include credit unions, and possibly lawyers behind the lawsuits don't know the difference between banks and credit unions," noted Keefe. "Over time, that may become more clear-as it may also become clear to these attorneys that credit unions are not really worth suing on this issue."
NAFCU spokesperson Patty Briotta added that while the association had no comment regarding the activities of classaction.org that may target CU overdraft programs, "We do have concerns about lawsuits against credit unions regarding ATM disclosures. For this reason we have been strongly advocating for the need for legislation to eliminate the unnecessary placard notice requirement contained in the Electronic Fund Transfer Act."
