Under current National Credit Union Administration rules, negative balances need to be resolved in 45 days. In December, the board approved a proposed rule that allows credit unions to establish their own specific time limits to resolve negative balances. Credit unions argue this is good for credit unions and their members, but consumer advocacy groups and NCUA Chairman Todd Harper are not convinced.
At the first meeting since Kyle Hauptman was sworn in as a member of the National Credit Union Administration, the board approved an interim final rule on overdrafts and a proposed rule on mortgage servicing. It also approved a change to its Multiple Common Bond credit union rule that board member Todd Harper believes violates the Federal Credit Union Act.
With stimulus legislation stalled in Congress, the Credit Union National Association and the National Association of Federally-Insured Credit Unions argue that the National Credit Union Administration should help credit unions survive the coronavirus economic crisis by adjusting regulations.
National Credit Union Administration board nominee Kyle Hauptman told the Senate Banking Committee recently that he believes that the NCUA should give credit unions “significant incentives” to become Minority Depository Institutions.
Financial regulators, including the National Credit Union Administration, should “do the right thing” and prohibit banks and credit unions from charging any overdraft or insufficient fund fees during the pandemic, the Center for Responsible Lending said in a new report Wednesday.
But a credit union affiliated with the center is not following that recommendation and is only waiving insufficient fund fees for up to two items a month.
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.
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.
In a startling turn of events, the National Credit Union Administration board tabled a final rule Thursday that would have allowed credit unions more flexibility in deciding when to require members to settle overdrafts.