ALEXANDRIA, Va. — In a recent legal opinion letter, NCUA stated that federal regulation pre-empts a Georgia state law prohibiting charging fees to non-accountholders for cashing share drafts on federal credit unions.

Federal credit unions must comply with state law unless specifically pre-empted, which it is in this case, according to NCUA Associate General Counsel Sheila Albin in legal opinion letter 07-0743 to Georgia Banking and Finance Commissioner Robert Braswell. The letter was in response to a query by Georgia Credit Union Affiliates attorney Richard Kessler.

"The Georgia law at issue, by its terms, prohibits a financial institution, including an FCU, from charging a fee for cashing a check or share draft drawn on it…Amendments to the Act adopted in 2006 grant explicit authority for FCUs to cash checks for persons in the field of membership 'for a fee.' In addition, FCUs have "such incidental powers as shall be necessary or requisite to enable…[them] to carry on effectively the business for which…[they are] incorporated. NCUA regulations implementing the Act's authority expressly permit FCUs to determine the fees, charges and other matters affecting the opening, maintaining and closing of a share, share draft or share certificate account and expressly states that '[s]tate laws regulating such activities are not applicable to federal credit unions.'"