Following the Consumer Financial Protection Bureau's June 29 deadline for comments on overdraft programs, CUNA on Monday released the comment letterit sent to the bureau, along with the results of a survey itconducted among its members.

In the letter, CUNA urged the bureau to refrain from imposingnew rules and limits on credit union overdraft programs.

“Credit unions offer overdraft programs as a convenience andaccommodation for their members and have indicated many membersappreciate these services,” wrote Deputy General Counsel MaryMitchell Dunn.

“As the bureau considers what next steps it might takeregarding overdraft programs, we urge the agency to take intoconsideration the importance of overdraft programs to consumers whodo not want to be embarrassed at the point of sale and want thecomfort of knowing a purchase or transaction, such as a mortgagepayment, will be honored,” Dunn wrote.

Dunn told Credit Union Times that CUNA made a point todifferentiate between programs that allow members to transfer fundsto cover overdrafts from deposit accounts, and programs in whichthe credit union covers overdrafts for members, also known ascourtesy pay.

“We really took them to task, because they didn't define whatthey meant by overdrafts,” she said.

The survey among 543 CUNA member credit unions revealed that allbut 2% surveyed offer some form of overdraft protection, withnearly all respondents offering funds to be transferred from asavings account.

More than 80% of respondents indicated that at least half oftheir members with checking accounts have signed up for one or moreoverdraft protection programs, and roughly two-thirds ofrespondents have staff inform members of such programs when amember contacts the credit union after incurring an overdrafts,Dunn said.

A June 2012 study by Pew Charitable Trusts reported that the country's 12largest credit unions charge an average of $5 per transaction totransfer funds from a deposit account, compared to a $12 average atthe nation's 12 largest banks.

Additionally, those top-12 credit unions charge justthree-quarters of what the top 12 banks do for courtesy payservices, Dunn said.

Despite the CUNA kudos, the Pew report was critical of creditunion overdraft practices, especially when it comes to disclosingfees.

“For several of the credit unions, the details of theiroverdraft penalty plans were too poorly disclosed to be able todetermine exactly the types of transactions allowed to overdraw anaccount,” the report stated.

However, CUNA reported its survey found credit unions dodisclose overdraft information to members. Almost all respondentsin the CUNA survey say they inform their members about overdraftprotection programs disclosures provided at account opening, aswell as verbally by staff when accounts are opened.

A study released Monday by the Independent Community Bankers ofAmerica reported that all community banks disclose overdraftprogram details, and nearly all inform customers of alternatives tooverdrafts, and structure overdrafts to minimize the potential forfees.

The Pew study recommends the CFPB implement new regulationsregarding overdraft disclosures, fees, transaction posting orderand dispute resolutions.

Dunn said CUNA is concerned the CFPB will develop new overdraftrules, so the trade organization will work to minimize the impacton credit unions.

“Any loss of flexibility, or requirements above what creditunions have to do right now, won't be effective because creditunions are already doing the right thing,” Dunn said.