HARRISBURG, PA — The Pennsylvania Credit Union Association has questioned a proposed NCUA rule which would impact how credit unions assess fees caused by holds on card transactions.

In its proposed changes to Part 706 of its regulations, which govern unfair or deceptive practices, NCUA advocated preventing federal credit unions for assessing over limit or overdraft fees if the overdraft came about as a result of a hold placed on the account as part of the authorization process.

The Association pointed out in a August 4 letter to the agency that its proposal would effectively make federal credit unions responsible for holds placed by merchants and over which they would have no control.

“Many debit holds occur as a result of merchant activity,” the Association said. “Credit unions have little to zero control over the amount of the hold(s) only the merchant determines what the hold amount will be. When a merchant places such a hold, the credit union cannot determine the difference between the purchase amount and any extra hold. The rule as written, therefore, imposes huge financial burdens on the consumer and the credit union and creates extra processing issues for all credit unions.”