WASHINGTON — Senate Democrats led by Banking Committee ranking member Elizabeth Warren (D-MA) are pressing credit unions to reassess their overdraft practices, American Banker reported.
Their push follows the NCUA’s decision in May to stop publishing overdraft and nonsufficient-fund fee income for individual credit unions — data the agency had made public only briefly, beginning in 2024, when it aligned disclosure requirements with those for banks.
Warren, joined by Sens. Cory Booker (D-NJ) and Richard Blumenthal (D-CT) sent letters to 21 credit unions seeking detailed information about their overdraft and NSF policies. The targeted institutions are those that federal data show collected the highest overdraft-fee revenue in 2024, American Banker stated.
The lawmakers requested detailed information on each credit union’s overdraft practices, including fee amounts, the number of member accounts closed due to overdrafts, and any policy changes planned for the year.
“The NCUA has decided to no longer publish overdraft and non-sufficient fund fee data, meaning that your members, Congress, and the general public will no longer have systemic insights into how much your credit union and its members benefit from overdraft fees,” the senators wrote. “This lack of transparency and accountability is concerning, given the administration’s rollback of other regulations designed to help consumers.”
America’s Credit Unions reacted to the move by the senators.
“Credit unions are the original consumer protectors, founded to safeguard the financial well-being of American families,” said Scott Simpson, president/CEO of America's Credit Unions. “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.”
The Defense Credit Council pointed out that 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," stated DCUC Chief Advocacy Officer Jason Stverak. "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.
“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," concluded Stverak. "Credit unions do not deserve to be tarred with the same brush. 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.”