America’s Credit Unions: Overdraft Data is Exempt from Freedom of Information Act

Trade group asks NCUA to reconsider release of overdraft and NSF data

Credit union overdraft and Nonsufficient Fee income should not be publicly disclosed because it is confidential business information and is exempt from the Freedom of Information Act, America’s Credit Unions told the National Credit Union Administration on Friday.

“If the NCUA is releasing Call Report data under separate authority, we would appreciate that clarification,” Carrie Hunt, America’s Credit Unions Chief Advocacy Officer, wrote in a letter to members of the NCUA board.

Starting March 31, credit unions with more than $1 billion in assets were required to report overdraft fee income and NSF fee income as part of their quarterly call reports. America’s Credit Unions estimated that more than 400 financial institutions will be impacted by the call report change.

NCUA Chairman Todd Harper earlier this year said that such information should be made public. Overdraft fees and NSF fees are targeted as part of the Biden Administration’s campaign to eliminate so-called “junk fees.” The Consumer Financial Protection Bureau has proposed regulating overdraft programs at financial institutions with more than $10 billion in assets.

In her letter, Hunt recommended that the NCUA further evaluate the legal and reputation risks associated with making overdraft information public. In addition, she wrote, the agency should have provided credit unions direct advance notice of the changes and then waited two quarters to implement them.

Citing reports about overdraft income from California state-chartered credit unions and banks, Hunt said that release of additional data by the NCUA “is likely to be spun in a misleading and potentially inaccurate way, resulting in irreparable harm to the positive reputation credit unions have worked so hard to achieve.”

In a report published in March 2023, the California Department of Financial Protection and Innovation found that state-chartered credit unions brought in $183.1 million in overdraft fees in 2022, compared with $35.1 million at state-chartered banks.

Hunt’s letter follows a similar one she sent last month to NCUA General Counsel Frank Kressman. In that letter, Hunt asked Kressman to issue a legal opinion regarding the applicability of FOIA exemptions governing overdraft fee and Non-Sufficient Fee revenue.