The National Credit Union Administration said credit unions that charge fees for automatic identity theft protection as part of free checking may be engaging in unfair and deceptive practices.
Those credit unions would need to disclose such fees and allow members to opt in, the agency said in a legal opinion last week. It said a credit union "should not assess such charges unless it is clearly within its contractual rights and has met all the relevant requirements of applicable laws."
Under the proposal, a credit union would automatically enroll members, without the members' request or consent, to receive certain services, such as identity theft protection, on free checking accounts. The credit union would deduct periodic fees from the members unless the members opt out of receiving the services. The truth-in-savings disclosure would list a $1 monthly fee for the services but describing the fee as optional.
Such a practice may violate the Federal Trade Commission Act, NCUA Truth in Savings Act rules and the NCUA's own advertising rule.
