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News Now

Washington
Survey consumers CUNA to legislators on overdraft changes
WASHINGTON (11/02/09)--Speaking before the House Financial Services Committee hearing on overdraft protection plan, Credit Union National Association (CUNA) witness Rodney Staatz advised members of the panel to conduct an "independent, unbiased" survey of consumer opinions on overdraft before they act on any legislation. Staatz is president/CEO of SECU of Linthicum, Md. In fact, Staatz told the panel, consumer protections to overdraft plans, should be addressed through regulation, not legislation. CUNA supports credit unions’ ability to offer overdraft protection plans to members and considers it an important member service that can help with short-term financial issues. Staatz told the assembled committee members that CUNA opposes H.R. 3904, The Overdraft Protection Act of 2009, because it could make it impossible for credit unions to offer the service to members. He warned legislators if credit unions drop the so-called “courtesy pay” programs, it would ultimately harm consumers, in part, by driving them to higher-cost alternatives. Testifying on his own behalf, former National Credit Union Administration Chairman Dennis Dollar concurred that H.R.3904 could eliminate credit unions’ ability to offer overdraft protections altogether. Dollar also indicated that the issue of overdraft fees could best be handled by individual regulators, and should not be treated on a statutory level. While many banks promote overdraft programs and make them mandatory parts of their checking account programs, Staatz said that although his credit union does offer a courtesy pay overdraft program, “SECU does not market Courtesy Pay because we do not want to encourage members to live beyond their means” by viewing it as available funds.


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