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Credit Unions and Other Depositories Dodge Overdraft Bullet for Now

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.

By Sarah Snell Cooke | Updated on October 02, 2007

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.

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