Simpson: ‘Credit unions are the original consumer protectors’

Following an effort by Sens. Elizabeth Warren, D-Mass., Richard Blumenthal, D-Conn., and Cory Booker, D-N.J., to collect information from certain credit unions about their overdraft practices, America’s Credit Unions President/CEO Scott Simpson highlighted the benefits of having these programs available to credit union members.

“Credit unions are the original consumer protectors, founded to safeguard the financial well-being of American families. Their overdraft programs are responsible, fully transparent, and designed to help hardworking members bridge short-term gaps without being pulled into predatory payday lending,” Simpson said. “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.”

America’s Credit Unions continues to support the ability of consumers to opt into overdraft protection, which is heavily regulated, and successfully advocated for the CFPB to overturn its rule capping overdraft fees at $5. Data from the Federal Reserve Bank of New York research found that 84% of overdraft users understood the cost in using overdraft services.

The organization has written numerous letters to legislators and regulators on the importance of allowing these services to be offered, noting that restricting them will ultimately lead consumers to less-regulated or predatory financial service providers. Member credit unions have also shared how these programs allow them to better serve their members, in op-eds and congressional testimony.