WASHINGTON — USA Federal Credit Union President/CEO Mary Cunningham told the House Subcommittee on Financial Institutions and Consumer Credit today that credit unions' are already operating within the spirit of Carolyn Maloney's (D-N.Y.) overdraft legislation.
"Credit unions have long been involved in providing some form of overdraft or bounced check protection for their members," Cunningham, who testified on behalf of CUNA, said. "This is fully consistent with the philosophy and mission of the credit union industry to serve members' financial needs and to help them resolve short-term financial problems."
Maloney, a primary CURIA co-sponsor, has introduced the Consumer Overdraft Protection Fair Practices Act (H.R. 946) that would require preauthorization by the accountholder before permitting an overdraft and restrict the language permitted in advertising for overdraft programs.
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When USA Federal Credit Union noticed some members regularly dipping into its Privilege Pay program after it was rolled out in 2003, the credit union modified its program, encouraging members to opt out if they did not want it and refunds fees liberally while offering financial counseling. The credit union also pays the smaller dollar items first and posts deposits before debits to minimize members' chances for overdraft fees.
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