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CFPB Overdraft Proposal
From The Nussle Report, April 5
America's Credit Unions submitted comments this week strongly opposing the CFPB’s latest proposal on overdraft fees, calling on the bureau to rescind the proposal or exempt credit unions entirely (which the Dodd-Frank Act permits it to do).
This proposal’s limits on overdraft services will harm consumers that rely on these value-based services they choose to opt into, decreasing access and raising the cost of financial services.
The proposal also:
- Exceeds the CFPB’s statutory authority by misapplying provisions to overdraft and impermissibly expanding definitions to bend the rule to fit its needs;
- Would impose a one-size-fits-all charge on all account holders, regardless of their overdraft usage, without considering proper incentives and consumer behaviors; and
- Will have broad ramifications across financial services as the marketplace and consumers react to constraints on larger entities and pressure smaller institutions to make changes they can’t afford in an attempt to stay competitive.
The Federal Reserve Bank of New York released a report the same day as comments were due on the proposal, reinforcing our assertion that consumers know and understand the nature of overdraft services.
We’ll continue to fight for your ability to provide the services your members want when they choose credit unions as their trusted financial partner.
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