Georgia Regulator’s Order Brings Parity in CU Overdraft Fees

A declaratory order issued by Georgia's financial regulator has brought parity in overdraft fee limitations for all of the state's credit unions.

The order, issued by Commissioner Kevin B. Hagler, exempts Georgia's state-chartered credit unions from fee limits on overdrafts from deposit accounts, bringing them in line with those of federally chartered credit unions.

The order, issued July 11 and prompted by requests from the Georgia Credit Union Association, follows on the heels of a similar declaratory order issued earlier on behalf of several state banks.

Both orders exempt their respective financial institutions from violating Georgia's usury limits, according to Angi Harbin, GCUA's director of communications.

“Looking at opinion letters issued by NCUA and the federal credit union act, it became clear that federally chartered credit unions would not be subject to the Georgia usury code, so the order provides parity between state- and federally chartered credit unions,” Harbin said.

“GCUA requested the department issue an order that would ensure state-chartered credit unions parity with federal credit unions operating in Georgia,” she said.

The order affects credit unions whose members overdraw share savings or share draft accounts using an ATM card, check or debit card. Under the order, state-chartered credit unions are now protected from violating usury limitations that do not apply to federally chartered institutions. 

“It is difficult to predict the impact this will have on credit unions and their members, as the order does not require state-chartered credit unions to make a change in their overdraft fee structure, and it does not affect federally-chartered credit unions at all,” Harbin said.

The earlier declaratory order on behalf of Georgia's banks was prompted by a Georgia Court of Appeals decision in the case of Synovus Bank vs. Griner. The petition for certiorari, a writ that seeks further legal review, is currently pending before the Georgia Supreme Court, according to Georgia Department of Banking and Finance's Oscar B. Fears III.

“In light of the pending cert petition, the department has determined that it will not make any public comments on the declaratory orders at this time,” Fears added.