To our clients and friends:
On December 10, the National Credit Union Administration issued to all federally insured credit unions Letter 24-CU-03 entitled “Consumer Harm Stemming from Certain Overdraft and Non-Sufficient Funds Fee Practices.” The guidance describes certain fee practices that the NCUA believes are likely considered “unfair” or “deceptive” practices under federal law, exposing credit unions to the risk of an enforcement action. The guidance also sets out a series of risk management principles for credit unions that charge these fees. The guidance suggests the NCUA will examine credit unions for these practices and pursue enforcement actions against those institutions that continue to rely on fee income generated by these practices. Our Alert regarding the NCUA’s supervisory priorities is available here.
Luse Gorman routinely advises credit unions on compliance issues, regulatory questions, and enforcement actions, and counsels those institutions on the impacts of new developments at the federal and state level. To learn more about our firm and services, please visit our website.