We're not sure if it's a trend or merely a coincidence, but there have been quite a few articles in the trades recently that paint overdraft protection in a more positive light than usual. We think it is beneficial to share these articles that substantiate our belief that overdraft protection programs are, in fact, helpful to many consumers in meeting short-term liquidity needs. Further, the majority of consumers who access overdraft privileges do so as the result of an informed and conscious decision.
This article roundup is just our way of 'balancing the scales' against the plethora of negative publicity from some government agencies and consumer advocacy groups.
ARTICLE: Consumers Lose If CFPB Overshoots on Overdraft, American Banker, November 10, 2015
Many Americans who cannot cover regular or emergency expenditures are also finding it harder to obtain traditional forms of credit to tackle unexpected expenses, such as an emergency car repair or medical need. But rather than ease this burden, the Consumer Financial Protection Bureau is proposing to take away viable short-term funding options.
ARTICLE: A World Without Overdraft Protection (It Ain't Pretty), American Banker, January 5, 2016
If the CFPB issues an unreasonable mandate for banks on overdraft fees, the negative effect of such an action would be immediate. Consumers would be charged an insufficient funds – known as NSF – fee by both the bank and by merchants unable to process the transaction.
ARTICLE: NAFCU watching CFPB rules on overdraft, more, NAFCU, January 5, 2016
NAFCU expects that an overdraft rule may not be finalized in 2016. A NAFCU survey also indicates that many credit union members rely on overdraft programs to meet monthly obligations and emergency expenses, and that the loss of such programs could lead those members to seek out more expensive alternatives.
ARTICLE: Survey: Overdraft programs see widespread support, NAFCU, December 7, 2016
“The loss of [the overdraft] service that they have come to rely on would result in widespread dissatisfaction among members with the credit union, and the members themselves could suffer embarrassment and a decline in their credit rating when transactions are declined.”