MADISON, Wis. — One credit union here that seeks to help members avoid NSFs, has concerns over a number of the provisions being proposed in federal legislation to limit those fees.
UW Credit Union's checking products are designed to help its members avoid incurring NSF and overdraft charges, said Paul Kundert, president/CEO.
"We don't promote the use of what the financial industry calls 'courtesy pay,' but we do provide an overdraft service as a last resort rather than return checks unpaid. At UW Credit Union we only use the actual account balance to authorize debit card and ATM withdrawals, we post checks in the order that minimizes overdrafts, we sweep funds out of other accounts, and extensively promote low-cost overdraft lines-of-credits to our checking members. In addition we cap daily overdraft and NSF fees to a combined total of three per day regardless of the actual number of total NSFs and overdrafts. We have found that to be an adequate incentive to encourage people toward responsible behavior."
Kundert said that while many aspects of the pending legislation do seem to be "reasonable consumer protections," he does have concerns with a number of provisions that are included in some of the bills.
"Our key concerns include the requirement to opt-in, primarily because of the unnecessary expense and confusion associated with that kind of communications undertaking," he said. "Also, prohibiting the assessment of NSF fees on ATM and debit card transactions doesn't seem to make sense when limitations in the payment system networks render it impossible for even the best intentioned institution to prevent them entirely. Finally, while we aren't concerned with the concept of daily limits on fees, we don't think the consumer would benefit from limits accumulated over monthly, quarterly, or annual periods. If there is daily value to the consumer in having overdraft service as a last resort - and we think there is - then it shouldn't be turned on and off arbitrarily."
