Callahan & Associates has criticized data that recently appeared in USA Today in reporting on credit union's use of overdraft protection programs.
While sidestepping the issue of how some credit unions structure their short-term loan programs, the subject of some of the paper's stories, the firm pointed out that some of the statistics a USA Today columnist used were at odds with those collected by the NCUA (www.creditunionsrising.com).
Callahan & Associates pointed out that USA Today writer Sandra Block reported "67% of credit unions and 43% of banks have courtesy overdraft policies," but according to the NCUA, only 36% of credit unions offer the product. Of those, it cannot be discerned how many enroll their members automatically.
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She also reported, "Last year, credit unions earned $6.6 billion in overdraft income." However, Callahan's said that figure represented roughly all sources of CU fee income.
"The call report does not require credit unions to report courtesy income separate from fee income," the firm observed, adding, "The Callahan Non-Interest Income Survey has historically found that 20% to 25% of total credit union noninterest income is derived from courtesy fee income, resulting in a projection of approximately $2.5 billion for the industry in 2008, not the staggering $6.6 billion reported."
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