Senate Democrats Send Letters to 21 CUs Requesting Detailed Info on OD/NSF Fee Practices

WASHINGTON — A group of Senate Democrats led by Sen. Elizabeth Warren, D-Mass., sent letters Monday to 21 credit unions seeking detailed information on their overdraft and non-sufficient funds (NSF) fee practices.

Joining Warren on the letter, first reported by American Banker, are Sens. Cory Booker (D-NJ) and Richard Blumenthal (D-CT.)  The letter identifies the credit unions that federal data show collected the most overdraft/NSF-fee revenue in 2024, according to information collected by NCUA. 

The letters ask for disclosures on how much each institution charged per customer, how many accounts were closed in connection with fee activity, and whether the institutions plan to revise their overdraft policies going forward, according to American Banker. 

Data No Longer Being Published

The Senate Democrats’ letter comes after NCUA Chairman Kyle Hauptman announced during America’s Credit Unions’ GAC earlier this year that  Call Report Data related to overdraft income collected by credit unions will now be confidential. There had been considerable scrutiny of credit union OD/NSF income and its collection since NCUA—under then Chairman Todd Harper–announced it would collect and publish the information for credit unions of more than $1 billion in assets.

In their letter, the senators wrote that “this lack of transparency and accountability is concerning … given the administration’s rollback of other regulations designed to help consumers,” according to American Banker. 

The Targeted CUs

The 21 credit unions named in the letter include:

• Navy Federal
• Broadview FCU
• State Employees
• Vystar Credit Union
• Municipal Credit Union
• Suncoast CU
• CommunityAmerica Credit Union
• Everwise Credit Union
• Randolph-Brooks FCU
• Eastman CU
• Mountain America CU
• Idaho Central CU
• America First CU
• Police & Fire FCU
• Desert Financial CU
• Security Service FCU
• MidFlorida CU
• Members 1^st FCU
• Golden 1 CU
• California Credit Union
• Northern Island CU

Not included among those credit unions is Frontwave CU in Oceanside, Calif., which has been targeted several times by Warren and others over its OD/NSF practices and the income it has generated as a result. The senators have suggested that income is coming from young Marine recruits served by the credit union, as the CU Daily reported here.

America’s Credit Unions Responds

“Credit unions are the original consumer protectors, founded to safeguard the financial well-being of American families,” Scott Simpson, president and CEO of America’s Credit Unions, said in a statement. “Their overdraft programs are responsible, fully transparent, and designed to help hardworking members bridge short-term gaps without being pulled into predatory payday lending. We respect Senators Warren, Blumenthal, and Booker’s commitment to working families and look forward to working with them so they understand the benefits of these programs and ensure consumers continue to have access to safe, affordable options that put people over profits.” 

Defense Credit Union Council Responds

“Credit unions operate on an entirely different model: we are not-for-profit, member-owned, and dedicated to returning any surplus to our members — with lower fees, better savings rates, and services that millions of working families and military households rely on,” Jason Stverak, chief advocacy officer with the Defense Credit Union Council, said in a statement. “Overdraft protection at credit unions is voluntary, transparent and often lifesaving. It exists to help members who live paycheck to paycheck bridge a short-term gap — not to trap them in debt.

“If regulators or lawmakers heed this letter and broadly eliminate or restrict overdraft options across the board, the real casualties will be everyday Americans — active duty service members, veterans, working parents — who will lose access to a trusted safety net just when they need it. Many will be left with no choice but to turn to payday lenders or face bounced checks, late fees, or even eviction when timing mismatches occur,” Stverak continued.

“Rather than penalizing community-based credit unions that put people first, policymakers should focus their attention on the big banks that have built their business model around maximizing fee-driven profits. Credit unions do not deserve to be tarred with the same brush,” Stverak added. “If you care about protecting consumers, especially our nation’s service members and working families, you should oppose sweeping restrictions and preserve responsible overdraft services that help — not hurt — those they were designed to protect.”