ARLINGTON, Va. — Programs that seek to protect credit union members from the full impact of checks drawn on insufficient funds are both a significant source of non-interest income for CUs and the subject of continuing scrutiny.

Critics of the programs charge they have become a profit-center for the financial institutions that deploy them and that banks and credit unions use practices that lead more of the depositors to need the programs. They further charge that the programs end up hurting low-income depositors more than helping them because depositors get trapped in a financial pit these programs help them dig.

Defenders of the service point out that the vast majority of the depositors are grateful for these programs, that they benefit from them and that it is entirely proper for a credit union to charge a member a fee for a service that helps the member's financial life. They also maintain that credit unions generally do not engage in the sorts of financial manipulation that the critics charge.