National Association of Federally-Insured Credit Unions President/CEO B. Dan Berger Thursday asked two National Credit Union Administration board members to reconsider their decision at May’s board meeting and to support Chairman Rodney Hood’s proposal to remove the 45-day time limit for credit unions to “cure” an overdraft by one of its members.
“No member of the NCUA Board defended the merits of the 45-day timeframe, and the requirement was widely characterized as overly prescriptive and outdated,” Berger wrote in a letter to the agency board.
By endorsing Hood’s proposal, Berger is wading into the first open dispute among NCUA board members since Hood and Harper took office last year.
Hood presented his plan at the board’s May meeting. It 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. He said that credit union members needed help as a result of the coronavirus crisis.
Harper said he opposed the plan, saying it did not ease the financial problems that credit union members were having because of the pandemic. He mentioned the capping or elimination of overdraft fees as ways that members could be assisted. He said he also opposed Hood’s plan because it was being presented as an interim final rule that was not open to comment before it went into effect.
Board member J. Mark McWatters said he opposed the plan on the procedural grounds alone.
Hood offered a motion to bring the plan to a vote, but it was tabled after he did not get a second. He said he reserved the right to bring it to the board again if there was public support for the proposal.
In his letter, Berger said that the 45-day rule is not imposed on other financial institutions and places restrictions on a federal credit union’s ability to help members. “This arbitrary regulatory limitation puts credit unions and their members at a disadvantage, especially during the COVID-19 pandemic, and does not align with rules for banks and other depository institutions,” he wrote.
Following the board meeting, CUNA officials also lamented the decision to table the plan. “Whether we’re in a time of crisis or not, credit union members benefit when regulations are written with flexibility. This represents a missed opportunity,” said CUNA Chief Advocacy Officer Ryan Donovan said at the time.