WASHINGTON—The issue of overdraft fees raised its head in yet another Senate hearing, as did questions around cybersecurity risks to credit unions.
Both issues were raised during a Senate Banking, Housing, and Urban Affairs Committee hearing focused on the Financial Stability Oversight Council’s (FSOC) report to Congress at which Treasury Secretary Janet Yellen testified.
During the hearing, the Committee discussed stablecoin legislation, inflation, and Russian sanctions.
But committee Democrats also shared their displeasure with banks’ reliance on overdrafts fees as a source of revenue, as well as the risks posed to credit unions via cyberattacks – specifically calling for third party vendor oversight authority for NCUA, which has sought the additional powers.
Sen. Raphael Warnock (D-GA) asked Yellen if she thought that banks’ use overdraft fees as revenue was a sound practice, to which she responded that she found some of these fees “abusive.”
When asked how she would work with other regulators to hold banks accountable on this issue, Yellen responded by stating it was not the FSOC’s responsibility, but rather under the domain of the CFPB, NAFCU noted.
Risks to CUs
Separately, Sen. Jon Ossoff (D-GA) raised questions around risks posed to credit unions by cyberattacks, calling for third-party vendor authority at the NCUA. Ossoff said he is working on legislation to give the agency third-party vendor authority, with Yellen followed up by describing the lack of such authority as an “important gap” and further adding she would like to see the legislation, NAFCU said.
Both NAFCU and CUNA have opposed the expanded authority for the credit union regulator.
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