WASHINGTON — America’s Credit Unions pushed back against Senate Democrats’ concerns about overdraft practices, telling lawmakers that credit unions’ programs differ significantly from those of large banks and are designed to support members rather than generate profit.
In a letter dated Dec. 3 to Sens. Elizabeth Warren, Cory Booker and Richard Blumenthal, America’s Credit Unions President and CEO Scott Simpson responded to lawmakers’ Dec. 1 inquiries to 21 credit unions regarding their overdraft and Courtesy Pay programs.
Simpson said some of the credit unions contacted do not operate formal overdraft or Courtesy Pay programs, suggesting “confusion regarding nomenclature and data.”
Group Defends Mission, Structure
In the letter, Simpson emphasized that credit unions are fundamentally different from for-profit institutions because they are member-owned cooperatives, not shareholder-driven banks.
“The guiding principle of all credit unions is to work to increase the financial stability of American families, small businesses and local economies,” he wrote. “They are completely dedicated to serving the needs of their member-owners.”
He added that the not-for-profit model means credit unions tailor services to member needs rather than maximizing fee income, citing the industry’s history of offering lower fees and consumer-friendly policies.
Calls for Context in Overdraft Debate
The exchange comes as Warren and fellow Democrats continue pressing financial institutions to reduce or eliminate overdraft fees, which they argue disproportionately burden low-income consumers. Their letter to the 21 credit unions sought detailed information about fee structures, reliance on overdraft revenue and any changes made in response to public scrutiny.
Simpson did not directly address each question posed to individual credit unions but reiterated that the industry advocates for policies “that allow the industry to effectively meet the needs of their over 144 million members nationwide.”
He urged lawmakers to consider the cooperative mission and member-centric nature of credit unions as they review overdraft practices and regulatory approaches.
