CUNA and NAFCU want credit unions to be able to charge a fee for covering an overdraft fee in some cases even if the consumer doesn't opt in for such coverage, according to letters both trades sent to the Federal Reserve.
Both associations said the proposed regulation that would require people to opt in, if they want to participate in an overdraft program, could cause credit unions to lose money when they approve a transaction based on sufficient funds but that proves not to be the case.
"NAFCU understands that there were some abuses regarding overdraft protection that the board has rightfully addressed. Nonetheless, given that financial institutions cannot possibly have real-time knowledge of all of a consumer's purchases, the rule should provide a narrow exception in instances where institutions approve a transaction when adequate funds exist and are then contractually obligated to pay that transaction at a later date when there are insufficient funds," wrote Dillion Shea, NAFCU's associate director of regulatory affairs.
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