NCUA LENDING REGULATIONS

Question 1

NCUA allows credit unions to advance money to members to cover overdrafts without having a credit application from the borrower if the credit union has a written policy on account overdrafts. List two of the four items required in this policy.

Answer 1

The policy must: 1) set a cap on the total dollar amount of all overdrafts the credit will honor; 2) establish a time limit not to exceed 45 calendar days for the member to deposit funds or obtain an approved loan to cover the amount of the
overdrafts; 3) limit the dollar amount of overdrafts the credit union will honor per member; and 4) establish a fee and interest rate to be charged to members for honoring overdrafts.