Credit union organization misses the point again with Overdraft Protection Act

by QCash Financial CUSO

The back and forth between what’s best for underserved credit union members and consumers continues when conversation turns to near-universally disliked overdraft protection (ODP), its base and outdated function, and its dwindling future in the financial services industry.

NAFCU Vice President of Legislative Affairs Brad Thaler wrote a letter to the House Financial Services Committee (HFSC) leading up to its pending markup where the Committee will discuss the NAFCU-opposed Overdraft Protection Act. This Act would prohibit a financial institution from engaging in unfair or deceptive acts in connecting with overdraft coverage. Thaler stressed the association’s stated primary concern regarding new restrictions and general failure to recognize the “opt-in” feature many overdraft programs offer today.

The NAFCU has claimed to consistently support a fair, transparent, and competitive financial services market, and has warned about past legislative attempts to limit or eliminate overdraft protection programs that could result in notable financial and economic impacts on underserved members, consumers, and credit unions themselves.

The question remains, however, why such outdated and damaging ODPs even exist when there are better, more financially healthy options available.

 

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