In an opinion-editorial article published Wednesday by Credit Union Times, Credit Union National Association (CUNA) President Jim Nussle and National Association of Federal Credit Unions (NAFCU) President Dan Berger set the record straight on Aaron Klein’s recent article in Politico, highlighting his stunning lack of awareness on credit union overdraft protections.
“Far from the inflammatory terms, the fact is credit unions are unquestionably one of the most — if not the most — consumer-friendly participants in the marketplace,” the two industry leaders wrote. “The data shows it from both a financial perspective and how our members feel about their credit union. Mr. Klein diminishes generations of credit unions putting people over profits, and also shifts focus away from the numerous predatory entities in the marketplace that credit unions exist to fight against.”
Nussle and Berger also point out that “every credit union overdraft program is different across the county and credit unions evolve to meet the needs of their members, not the other way around.”
Additionally, many state-chartered credit unions could be subjected to multiple examinations a year, depending on the schedules of the National Credit Union Administration (NCUA), state regulators, and potentially the Consumer Financial Protection Bureau (CFPB) if the credit union is over $10 billion in assets.
“Mr. Klein can personally object to how consumers choose to manage their finances, but it’s unacceptable to paint credit unions and the good work they do in such a misleading way,” Nussle and Berger concluded.
The California and Nevada Credit Union Leagues monitored the situation in conjunction with CUNA over the past two weeks. The Leagues and CUNA were immediately aware that the Politico opinion piece could be reaching the eyes and ears of some members in Congress, state lawmakers in California, regulators, and other policymakers.
The author’s hit job specifically targeted state-chartered credit unions in California using overdraft and non-sufficient funds fee data collected by the California Department of Financial Protection and Innovation (DFPI). It incorrectly insinuates credit unions are involved in abusive practices.
The “news” isn’t new, as the Leagues alerted credit unions to the DFPI’s first annual report of income from fees on non-sufficient funds and overdraft charges this past April. The DFPI report — covering 2022 data on all California state-chartered banks and credit unions — is myopic in viewpoint and does not paint the entire picture when it comes to credit unions’ comprehensive services to their members.
The Leagues are always on the lookout when persuasion pieces are published, as well as their impact that can potentially lead to unintended consequences for credit union members and consumers. Going forward, the Leagues will keep credit union leaders informed of anything they need to know regarding this delicate issue.