NCUA Plans Overdraft Scrutiny with a Close Eye on Financial Inclusion
Source: American Banker (subscription may be required)
Regulators at the National Credit Union Administration are taking a deeper look at overdraft programs for 2022 as part of a mission of combating financial exclusion.
The NCUA’s heightened scrutiny of the fee programs comes as financial institutions including Bank of America and Capital One are either modifying their overdraft charges or doing away with them entirely. Combined with competition from challenger banks, this trend has prompted many credit unions to make changes to their own overdraft policies to stay competitive.
Credit union trade organizations like the Credit Union National Association and the National Association of Federally-Insured Credit Unions say that the NCUA’s review of overdrafts is logical when considering the changing climate for the programs.
The NCUA’s decision to focus on overdraft practices aligns with the agency’s past decisions, as well as current initiatives from other regulators such as the Consumer Financial Protection Bureau, according to Alexander Monterrubio, senior director of advocacy and counsel for CUNA.
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