The National Credit Union Administration will no longer publish overdraft and non-sufficient fund fee income for individual credit unions, the regulator announced Monday.

Speaking at the America’s Credit Unions’ Governmental Affairs Conference in Washington, D.C., NCUA Chairman Kyle Hauptman said the agency will collect the data during supervisory examinations.

“There is a well-intentioned movement aimed at protecting consumers from excessive fees, which is something we all support,” Hauptman said. “However, we must also consider the unintended consequences of such policies.”

Hauptman said the previous data collection policy incentivized credit unions to avoid serving the needs of low-income and underserved communities. On top of that, such fees can be the best option in a bad situation for some consumers, saving money and protecting their credit scores, he said. 

“Overdraft also protects people from much higher costs imposed by their local governments,” Hauptman added.

Under the previous data collection policy, the NCUA required federally insured credit unions with more than $1 billion of assets to disclose, separately, income from overdraft and non-sufficient funds fees. 

This data was available to the public on an individual basis and in the aggregate. 

Under the new policy, which goes into effect with the first-quarter call report cycle, the NCUA will collect overdraft and NSF fee data as part of the examination process. 

The agency will continue to publish overdraft and NSF fee income data in the aggregate once updates to its examination system are complete.

At the same time, the Federal Deposit Insurance Corp. recently said that it will no longer disclose the asset size of institutions on its “problem bank list” due to potentially negative consequences.

With the changes in the banking industry during the past 35 years, it has become easy to identify if a large bank is added to the list, FDIC acting Chairman Travis Hill said in  a statement. He said problem banks identified by the public could lead to negative consequences, such as a run at a large bank that is experiencing severe financial distress.

Additionally, customers might withdraw funds from a bank incorrectly identified as added to the list or a large bank downgraded for reasons other than deteriorating financial condition due to misplaced fears, Hill said.

“For the reasons stated above, the FDIC is not disclosing total assets on the Problem Bank List as part of the [Quarterly Banking Profile] materials and will not do so going forward, returning to the original practice of only disclosing the total number of banks on the list,” Hill said.

Hauptman said the NCUA’s regulatory framework should protect consumers from predatory practices without depriving them of the financial tools they need.

“The appropriateness of overdrafts and NSF fees charged is a matter between a credit union and its member-owners, who ultimately determine how their credit union is run,” he said.

“The previous data collection policy incentivized credit unions to avoid serving the needs of low-income and underserved communities.”

 – Kyle Hauptman
Board chairman
NCUA