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

In its proposed changes to Part 706 of its regulations, whichgovern unfair or deceptive practices, NCUA advocated preventingfederal credit unions for assessing over limit or overdraft fees ifthe overdraft came about as a result of a hold placed on theaccount as part of the authorization process.

The Association pointed out in a August 4 letter to the agencythat its proposal would effectively make federal credit unionsresponsible for holds placed by merchants and over which they wouldhave no control.

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