Harmful Legislation

The History: We all know about the big economic meltdown from Wall Street to the banking industry. Congress wants to change laws to fix this so it never happens again. But the problem is, they’re including credit unions. Credit Unions weren’t part of the problem – we continued lending and saving members money. We are part of the solution.

So what are the three issues?

Regulatory Reform: As not-for-profits, credit unions are fundamentally different than for-profit banks and regulated differently. Here’s what regulatory reform could do:

• Increase regulation on credit unions (we are already the most heavily regulated financial services group).
• Force regulation meant for huge multi-state banks onto neighborhood credit unions.
• Increased regulation would a greater burden to credit unions who already are being crushed by regulatory burdens.
• Cost members money since regulations mean more staff time on non-member services!

Overdraft Protection: Congress wants to severely restrict “courtesy pay” overdraft protection to only one per month – instead of letting members choose what’s best for them.  Here’s what it could do:

• Members could end up with more fees - one for insufficient funds, and a merchant fee for a bounced check. 
• Members could be stranded when they need a courtesy payment – at the gas station, the pharmacy or their mortgage payment.
• If overdraft fees go away, then credit unions may have to start charging for free services – like checking.

Interchange: To increase profits, huge retailers want to shift their usual costs of doing business when accepting credit and debit cards back onto your credit union – and members!  Here’s what could happen:

• Your credit union could be forced to charge or raise annual credit card fees and raise interest rates.
• Some credit union may scale back or eliminate card reward programs, or stop offering low rate credit cards altogether – and credit union rates are the best!
• Without credit union card programs to compete with, bank credit card rates could be even worse.

How you can help: Visit CUVoice.com – it’s where  you can learn more about the issues and contact your member of Congress.

According to the Credit Union National Association (CUNA), a recent survey commissioned by the Consumer Federation of America (CFA) and CUNA revealed that, while most consumers (61%) are aware there are new credit card protections, most (65%) don’t know they take effect later this month and don’t understand the specific protections the U.S. Congress approved last year. For more information, please use the links below:

Fed Card Rules
CUNA/CFA Survey