WASHINGTON — After delaying markup of the Consumer Overdraft Protection Fair Practices Act (H.R. 946) by one day last week, the House Financial Services Committee has postponed the markup indefinitely.
The credit union trade associations have opposed the bill because it would place overdraft protection accounts under the Truth in Lending Act and require the disclosure of fees assessed as an APR, eliminating credit unions from offering the product because of the 18% usury cap in the Federal Credit Union Act. Federal regulators had previously ruled that overdraft protection is an extension of a deposit account and therefore not subject to TILA; the legislation as written, would treat the product as a loan.
The postponement was reportedly due to increasing opposition to the bill by committee members, according to CUNA. NAFCU Director of Legislative Affairs Brad Thaler observed, "I think there's a lot of concerns that are out there, both in the credit union community and the financial services community."
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