NEW YORK (3/30/09)--An Oregon credit union administrator weighed in on the issue of overdraft fees in a Thursday article in The Wall Street Journal concerning the Federal Reserve's decision about whether to reign in the fees.
The Fed's 60-day public comment period on the matter ends March 30.
The Fed is contemplating several different approaches to the issue, ranging from not changing any current practices to requiring financial institutions to give notification to consumers on every purchase that would cause an overdraft, the newspaper said.
However, many financial institutions said the latter option is not realistic
"People think when they're making a purchase it's like a direct line into their account but it's not; it's a third-party processor making the transaction," Judy Rigwood, compliance director at TLC FCU, a $90 million asset, Tillamook, Ore.-based credit union, told the paper. "We don't have the technology to do that.
"Frankly, we offer overdraft service as a way to help our members," she added. "Some people rely on it almost like they would a payday loan. It allows them to make vital purchases."
courtesy of cuna.org