18 Credit Union Associations Unite in Defense Against Overdraft Rule
Yesterday, 18 credit union leagues and associations filed an amicus brief in support of America’s Credit Unions’ recent federal lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) final rule that sets a fee cap on overdraft protection programs. Collectively, leagues and associations that filed the amicus brief represent 3,237 credit unions and 105,000,000 credit union members.
The amicus brief highlights the significance of credit unions’ unique member-owner relationship that is fundamental to their mission of serving their communities. The CFPB’s final rule focuses on calculating costs and assessing fees, failing to account for credit unions’ unique capital and operational realities. The final rule was developed with data from five financial institutions that does not represent the diversity of the financial services industry.
Paul Mercer, President of the Ohio Credit Union League — which spearheaded the initial legal response to the CFPB’s rule in conjunction with America’s Credit Unions — emphasized that member choice and need remain paramount. “Consumers and credit unions of all sizes would unintentionally bear the negative brunt of the CFPB’s misdirected rule,” he said. “The fee cap ignores market realities—overdraft programs are a costly, and mostly break even, service for credit unions. But they are widely used, offering members a lifeline from their trusted financial cooperative when they need it most. We must preserve credit unions’ ability to remain autonomous in serving their members.”
“Representing a diverse spectrum of credit unions, state credit union leagues and associations often work collaboratively to protect credit union members and promote fair and accessible financial services,” said American Association of Credit Union Leagues President Brad Miller. “Eighteen Leagues coming together to collectively support America’s Credit Unions’ legal challenge to the CFPB’s final overdraft rule is a powerful example of how collaboration can amplify the voices of millions of Americans.”
The CFPB’s finalized rule disregards decades of precedent set by the Federal Reserve Board. The amicus brief argues the CFPB has overstepped its statutory authority by attempting to classify overdraft services as extensions of credit under the Truth in Lending Act and has failed to consider the broader economic and operational impacts of the rule. Ultimately, the rule threatens to reduce access to financial services in rural areas and underserved communities which directly goes against the mission of credit unions.
The 18 state credit union leagues/associations represented by the amicus brief include:
- California Credit Union League
- Carolinas Credit Union League
- Cooperative Credit Union Association
- Cornerstone League
- Illinois Credit Union League
- Kentucky's Credit Unions
- Luminate Louisiana Credit Unions
- Michigan Credit Union League
- Minnesota Credit Union Network
- Mississippi Credit Union Association
- Nebraska Credit Union League
- Nevada Credit Union League
- New York Credit Union Association
- Ohio Credit Union League
- Tennessee Credit Union League
- The League of Credit Unions & Affiliates
- Utah's Credit Unions
- The Wisconsin Credit Union League
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