CFPB overdraft proposal will harm credit union members, should be withdrawn

America’s Credit Unions vehemently opposes the CFPB’s proposed rule on overdraft fees, as it will harm community-based credit unions and their members, the organization wrote to the CFPB Monday. The comments were sent in response to the CFPB’s proposal on overdraft services charged by financial institutions with more than $10 billion in assets.

“The proposed rule, with its singular focus on overdraft, ignores the interconnected nature of financial products and services and would only serve to harm or eliminate programs that consumers benefit from,” wrote America’s Credit Unions’ James Akin. “Furthermore, the proposed rule, in the guise of providing a benefit to consumers, would instead drastically reduce the ability of community-based credit unions to help their members in times of financial uncertainty and have widespread impacts on supposedly exempt credit unions and their members.

“The Bureau should rescind the proposed rule and focus its efforts not on setting market prices, an authority the Bureau does not have, but rather on educating consumers and empowering community financial institutions to provide valued financial products and services,” he adds. “Alternatively, as credit unions represent such a small proportion of covered institutions and yet the exempt institutions would still be so seriously impacted, the CFPB should use its exemption authority to exempt all credit unions.”

Among the many concerns, Akin noted:


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