Latest ECU Monitor highlights overdraft programs, Regulation E, more

by NAFCU Newsroom

NAFCU’s latest Economic & CU Monitor – now available for download – examines several topics, including economic returns from January, overdraft programs, Regulation E compliance, token errors, and more.

According to the ECU Monitor, a major concern for financial regulators is financial institution compliance with consumer financial law regulating payments and overdraft programs. Overdraft programs continue to enjoy consumer support based on analysis of opt-in rates reported by NAFCU members.

The association’s 2021 Federal Reserve Meeting Survey revealed that a majority of credit union members have opted into courtesy pay programs. Often these programs serve as an alternative, cost-effective form of short-term credit for members that must make a time critical purchase and protects members from predatory payday lenders. Respondents also reported that overdraft programs help support free checking accounts, financial literacy, and emergency loan programs.

However, overdraft programs remain the subject of ongoing regulatory scrutiny. The NCUA has indicated in its 2022 supervisory priorities that examiners will collect policies and procedures governing credit union overdraft programs; the CFPB also published new regulatory guidance regarding error resolution procedures.

 

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