NAFCU Expresses Concern Over Overdraft Protection Plan

ARLINGTON, Va. – NAFCU is concerned about pending legislation that may chase credit unions right out of the overdraft protection business. Under a bill that was submitted and then pulled, fees and charges that now are part of the fees for overdraft protection, or courtesy pay as some call it, would have to be rolled up in the interest calculation. That would put many credit unions over NCUA usury cap of 18% APR. For many credit unions the fee income from such programs has helped offset lower earnings from other investments and operations. NAFCU’s legislative expert, Brad Thaler, added there is concern about the 90-day implementation plan called for in the bill, as well as the opt-in requirement. Thaler said NAFCU has been working with U.S. Rep. Nydia Velazquez (D-NY) to see how the bill can be amended to help resolve the issues the current wording raises for credit unions.