The National Association of Federal Credit Unions said in a Monday letter to the Consumer Financial Protection Bureau that customers who use overdraft protection are familiar with the disclosures, adding that no further changes to overdraft programs are necessary.
“Overdraft protection is a useful service for some consumers, and those who use it understand the product and do not need still more disclosures warning about its perceived flaws,” NAFCU President and CEO Fred Becker said, according to CUInsight. “Credit unions already tailor their programs to meet their members’ needs. There is no one-size-fits-all approach to overdraft protection.”
The CFPB has pushed for greater transparency and simplicity in overdraft protection disclosure forms. In the letter, NAFCU urged the consumer watchdog to carefully assess the implications of any overdraft protection program regulations that could make it more difficult for credit unions to offer the service to customers.
NAFCU said that many credit unions already offer educational programs on finance to consumers who use the service excessively, ultimately rendering CFPB regulatory action unnecessary, CUInsight reports.
NAFCU said that a lot of attention has been given to instances in which an insignificant overdraft could result in a high overdraft fee.
“Credit unions generally do not operate in this manner,” NAFCU said, according to CUInsight.
The group said that credit unions are not-for-profit and owned by their customers, and, as a result, do not have the same incentive to generate profit through overdraft fees as some other institutions may.