State credit unions shouldn’t be subject to FTC fees proposal

The Federal Trade Commission (FTC) should avoid subjecting not-for-profit, well-regulated state credit unions to its proposal against unfair or deceptive practices related to fees for goods or services, America’s Credit Unions wrote to the agency Monday.

The FTC’s proposal—which targets bad actors who misrepresent the nature of certain fees—acknowledges it does not hold jurisdiction over federally-regulated financial institutions but could potentially include state-chartered credit unions.

“State-chartered credit unions are subject to a comprehensive framework of regulation, examination, and supervision that encompasses both state and federal regulations,” wrote America’s Credit Unions Senior Regulatory Affairs Counsel James Akin.

Akin also noted:

  • Credit union fee structures aim to cover costs and are offered to members with transparent information about services and fees;
  • Existing regulations like the Truth in Savings Act and Truth in Lending Act ensure credit unions disclose all terms and fees clearly, preventing them from engaging in the negative practices outlined in the proposed rule; and
  • Application of the FTC’s rule to state-chartered credit unions could lead to higher costs for basic services and a reduction in the quality and range of services offered.

Continuing to mischaracterize credit unions’ fee structures as “junk fees” could undermine the trust between credit unions and their members and have unintended negative consequences for the availability of affordable financial services, Akin added.

America’s Credit Unions will continue to monitor efforts related to financial fees.

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