ALEXANDRIA, Va. -
The federal regulator said that the Federal CU Act and NCUA's own regulations preempt a new Georgia law barring fees for non-account-holders cashing checks drawn on federal credit unions.
But federal charters must comply with the newly passed Hawaii Financial Abuse Act, which requires financial institutions to report suspected abuse of an elder. In the Georgia case, NCUA said federal credit unions must comply with state laws unless federal law provides a base for preemption by addressing the same issue, and the FCU Act specifically addresses the issue of check cashing fees. In addition, a recent federal court ruling found that the Georgia law was preempted by federal law with respect to nationally (federally) chartered banks.
Consequently, NCUA said FCUs may charge fees for cashing checks for non-members, NCUA said.
In the Hawaii case, NCUA noted the new elder abuse law requires all financial institutions to report financial abuse against any "elder" or anyone older than 62. The institution must report the suspected abuse to Hawaii's Department of Human Services. While the Gramm-Leach-Bliley Act bars a federal credit union from disclosing non-public personal information about a member to a third party with the member's "opting-out" of the privacy provision, neither the Act of the FCU Act allow NCUA to preempt a state law that requires FCUs to disclose non-public personal information, NCUA explained.
"To the contrary," ruled NCUA. "the requirement for notice to members and opting out do not apply when FCUs disclose non-public personal information to protect against or prevent fraud, unauthorized transactions, claims, other liability, or to comply with state law."
