CUNA Comments on Interim Final Rule (Truth in Savings)

October 4, 2010

Mary Rupp
Secretary of the Board
National Credit Union Administration
1775 Duke St
Alexandria, VA 22314-3428

RE: CUNA Comments on Interim Final Rule (Truth in Savings)

Dear Ms. Rupp:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the National Credit Union Administration’s (NCUA’s) interim final rule that clarifies the recent final rule that amends Regulation DD, the Truth in Savings Act (TISA), as they apply to the disclosure of overdraft and returned-payment fees. CUNA represents approximately 90 percent of our nation’s 7,700 state and federal credit unions, which serve approximately 93 million members.

Summary of CUNA’s Comments

Discussion

In 2009, both the Federal Reserve Board (Fed) and NCUA amended Regulation DD to require all financial institutions to disclose on the periodic statement the fees charged for overdraft services and the fees charged for returning items unpaid, both for the statement period and for the year-to-date. The rule also provides a sample form that may be used to comply with these disclosure requirements.

The interim final rule clarifies that the term “Total Overdraft Fees” must be used on the period statement when describing the total amount of fees imposed for paying overdrafts, and the sample form reflects this terminology. However, we believe credit unions and others should have the flexibility to use the term “Total Overdraft Fees for Paid Items” instead of “Total Overdraft Fees.” This alternative terminology will further enhance the distinction between fees that are assessed for paid items, such as the per-item charge for overdraft transactions, and items that are returned unpaid, which are also required to be disclosed under these rules.

In addition, the interim rule will incorporate additional, minor technical changes to the sample form that is to be used to disclose the total overdraft and returned item fees. While the existing and new sample forms are substantially similar, these changes will require credit unions to reformat these disclosures. This will impose additional burdens on credit unions that will have to make this minor change, which will not have any impact on the applicable information that is provided to members. For this reason, NCUA should provide the flexibility necessary so that credit unions may continue to use the original version of this sample form.

We understand that under TISA NCUA must issue rules that are substantially similar to the rules issued by the Fed and that the Fed’s rule requires the term “Total Overdraft Fees” and the use of the slightly modified sample form. However, the flexibility we are requesting will have no impact on the substantive provisions of these rules and, therefore, even with these differences the rules issued by NCUA and the Fed will still be “substantially similar.” For this reason, we believe NCUA should provide the flexibility that we are requesting and should not be concerned that these changes will violate the “substantially similar” provisions of TISA.

Thank you for the opportunity to comment on these clarifications to Regulation DD. If you have questions about our comments, please contact Senior Vice President and Deputy General Counsel Mary Dunn or me at (202) 638-5777.

Sincerely,

Jeffrey P. Bloch
Senior Assistant General Counsel