National Credit Union Administration Chairman Rodney Hood defended his decision Thursday to bring a final overdraft rule change to the board, saying he still believes the plan, which was tabled, is needed.
And he reserved the right to bring the plan back to the board for another vote.
“While it is rare for an open Board meeting to include an item that does not pass, it does occasionally happen,” Hood said. “If I only bring forth ideas to the Board that we know we have the votes for, it does not allow for an honest, open, and full debate. I brought this issue forth because I believe it is important. And the public has a right to transparency on this matter.”
Sources said that in the past, a chairman would not bring a policy to the board for a vote unless the chairman knew it would be approved.
Hood appeared to be soliciting public support for his plan. “I reserve my right as chairman to have the Board reconsider this rule if the public thinks this is important,” he said.
Earlier Thursday, Democrat Todd Harper and Republican J. Mark McWatters voted against the proposed interim final rule.
Hood’s proposal would have removed a 45-day time limit for credit unions to “cure” an overdraft by a member. The “cure” could be in the form of a deposit or a loan to the member by the credit union. Hood’s plan would have replaced the 45-day limit with a requirement that credit unions have a policy that sets a reasonable deadline for solving the overdraft.
Hood said that the agency’s Office of General Counsel had determined that it was proper to bring the policy change to the board as an interim final rule and that the change is needed to help credit union members weather the coronavirus pandemic.
Story updated on May 25, 2020 to reflect that proposal was defeated as a result of it being tabled.