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News Now

Washington
CUNA to testify vs. arbitrary overdraft-protection limits
WASHINGTON (10/30/09)—Although sympathetic with congressional intent to ban abusive practices connected with overdraft protection plans, the Credit Union National Association (CUNA) will testify today that pending bill H.R. 3904 is not the way to go. At a 9:30 a.m. (ET) House Financial Services Committee hearing today, CUNA witness Rodney Staatz will warn that The Overdraft Protection Act of 2009 could well force credit unions to drop courtesy pay programs to the detriment of consumers. Staatz is president/CEO if State Employees Credit Union (SECU) of Maryland. Staatz intends to tell the committee that while credit unions have several concerns with H.R, 3904, primary among them is its proposed limit on the number of overdrafts that can be provided by a credit union to a member. H.R. 3904 prohibits credit unions and other financial institutions from charging more than one overdraft fee per month and no more than six in a calendar year per transaction account. CUNA strongly supports the ability of credit unions to offer overdraft protection plans as a means to help their embers resolve short-term financial problems. Such programs, CUNA maintains, when used appropriately by consumers, serve as a valuable back-up to overdrawing checking accounts or relying on payday lenders or check-cashing businesses, and are fully consistent with the philosophy and principles of the credit union system. Staatz will use credit unions’members stories to illustrate to lawmakers how overdraft protection plans can make a positive difference in peoples lives. Also scheduled to testify are: Jim Blaine, president, North Carolina State Employees CU; Dennis Dollar, Dollar Associates, LLC; Mark A. Colley, president/CEO, Tulsa Postal and Community FCU, on behalf of National Association of Federal Credit Unions; Jean Ann Fox, director of financial services, Consumer Federation of America; Nessa Feddis, vice president and senior counsel, center for regulatory compliance, American Bankers Association; Eric Halperin, director, Washington office, Center for Responsible Lending; Pamela Banks, senior policy counsel, Consumer Union; Richard Hunt, president, Consumer Bankers Association; and, R. Michael S. Menzies, Sr., president/CEO, Easton Bank and Trust, on behalf of Independent Community Bankers Association.


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