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Hello, this is Samantha Shares. This episode covers N C U A Vice Chairman and Board Member Kyle S. Hauptman statement on the agency’s Collection of Overdraft and Non-Sufficient Fund Data

The following is an audio version of that statement.    This podcast is educational and is not legal advice.  We are sponsored by Credit Union Exam Solutions Incorporated, whose team has over two hundred and Forty years of National Credit Union  Administration experience.  We assist our clients with N C U A so they save time and money.  If you are worried about a recent, upcoming or in process N C U A examination, reach out to learn how they can assist at Mark Treichel DOT COM.  Also check out our other podcast called With Flying Colors where we provide tips on how to achieve success with N C U A.

N.C.U.A. Vice Chairman Kyle S. Hauptman Statement on Nonsufficient Funds (N.S.F.) Fees

N.C.U.A. Vice Chairman Kyle S. Hauptman during a meeting of the N.C.U.A. Board.

As Prepared for Delivery on May twenty second, 20 24

“No regulation or law passed by government repeals the laws of economics.”

I would like to use this meeting to talk about the N.C.U.A.’s recent decision to require credit unions with 1 billion in assets and over to publicly publish their revenue from overdraft fees and fees for insufficient funds.

No one likes paying those fees. I have paid them myself. But anytime you wake up and owe $X that day but have less than X dollars available, there are only a series of bad options. We are pressuring credit unions to limit what is often the least-bad option for members under financial stress.

I’m also aware that there are policy changes the federal government can make to reduce those sticky financial situations, just by making the existing financial system work better. As much as one-third of all late fees and overdrafts could be eliminated with faster payments that get people their money quicker, which is something Senator Schatz of Hawaii often mentions.

The reason for my comments today is that we have not discussed change in the fifty three hundred Report at a Board Meeting, and yet I can’t go to any event without being asked the same questions: “Why are you doing this to us? Do you realize how harmful it is to members?”

"No one likes paying those fees. I have paid them myself. But anytime you wake up and owe $X that day but have less than X dollars available, there are only a series of bad options."

My answers are, I wish the N.C.U.A. was not doing this – especially on such short notice – and finally yes, I do realize how harmful it is to consumers.

I found out about this burdensome requirement in January. In lieu of repeal, I have suggested several ways to make it less damaging to both credit unions and to the Share Insurance Fund. For example, the same data could be collected in a manner where it’s available to N.C.U.A. examiners and we only publish aggregate data. We could also listen to those pleading for adequate time to prepare, and not publish the data until next year, especially since it’s been harder than expected to figure out what numbers are to be used for each category. All my ideas were rejected. Credit unions will now face reputational risk for data that neither the N.C.U.A. nor the credit union knows to be correct.

So, we are now yet another agency mathematically incentivizing institutions to avoid serving low-income people. This policy is very clear: don’t serve the underserved.

We are now working against the Federal Credit Union Act, which states credit unions are “to create credit…for those of modest means.” Well, it’s not the rich that are going to worry about overdraft protection being removed. It’s not those with secure, high-paying jobs that will suffer from a further reduction in offers for