Litigation related to overdraft protection has focused mostly on the timing of clearing, posting and settlement of payments through the various networks—and whether members are aware of them. While many overdraft operations experts say these events are almost always dictated by independent processes, some lawyers are still filing suit.
$9.1 billion ESL Federal Credit Union, Rochester, New York, is one credit union at which posting order for multiple payments is strictly chronological and automated, reports Rich Pulvino, manager of corporate communication and social media. Posting order is not manipulated to benefit or punish the member, he emphasizes.
Sabeh Samaha, president/CEO of Samaha & Associates, Los Angeles and Miami, reports that posting order is carefully programmed by most credit unions so that credits post before debits.
“The last thing a CU wants is for a member to be hit with an overdraft fee after they have made a deposit they expect to cover their payments,” he observes. This programming has long been a part of routine operations, he notes.
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