NCUA’s proposal, which would permit federal credit unions (FCUs) to keep members’ negative account balances open for longer than the current limit of 45 days, offers no evidence that it will achieve its stated goal -- to provide relief to FCU members. At the same time, the proposal fails to consider the significant risks it poses members or include elements to mitigate those risks.
Credit union overdraft practices, like those of banks, most heavily impact the financially vulnerable and leave them worse off. During the best of times, any NCUA action related to overdraft practices should provide a net benefit to FCU members. During a health and economic crisis, it’s only more important that the agency take a do-no-harm approach. Instead, this proposal undermines and contradicts federal relief efforts.