The End of Courtesy Pay as We Know It?

On May 27th, 2009, three influential members of congress wrote a letter to Ben Bernanke requesting that the Federal Reserve "immediately address manipulative clearing practices" related to overdraft fees. Consider this: Today, President Obama sent Congress a bill that would create the Consumer Financial Protection Agency, which he said would better protect Americans from unscrupulous practices. And NSF fees are in the cross hairs.

Not too worried about it? Most credit unions would be in the red without fee income, and quite often Courtesy Pay and NSF fees provide the lion's-share of non-interest income. There is some talk of disclosing fees as a finance charge - this would mean you can no longer charge, say, $25.00 on a $50.00 transaction. Take a look - how would your income statement be impacted if you lost 10%, 20%, 50% or more of your NSF fee income? You might be surprised. A contingency plan may be in order.

My guess? SOME kind of "consumer protection" is inevitable related to NSF fees. Probably an "Opt In" requirement as well as restrictions on "series of fees" (fees caused by fees). But you might not want to go with my guess . . . I had some serious money on Hillary.

Here's the link to the letter. Read it and weep. http://www.federalreserve.gov/SECRS/2009/June/20090604/R-1343/R-1343_060209_21124_293484117638_1.pdf