The resolution to nullify the CFPB’s overdraft rule now is in President Trump’s hands.
The House on Wednesday adopted H. J. Res. 18 by a vote of 217-211. The Senate already has adopted the resolution, which now goes to the President for his signature. Trump is expected to sign the measure.
If allowed to go into effect as issued, the rule would limit overdraft fees to $5 at financial institutions with more than $10 billion in assets, unless they set a cap that covers their actual costs or they treat the payment of an overdraft as a loan and give appropriate disclosures under the Truth in Lending Act and regulations.
Financial trade groups sued, challenging the rule, which was scheduled to go into effect on October 1, 2025. However, anticipating changes to the rule, Acting OMB Director Russell Vought asked for a stay in the lawsuit.
Republicans on the House Financial Services Committee generally supported nullifying the rule and adopting the resolution, while Democrats supported the rule and opposed adopting the resolution.
“Overdraft protection is an optional service that financial institutions provide to help consumers avoid having purchases declined,” House Financial Services Committee Chairman Rep. French Hill, R-Ark. said on the House floor.
He said that the CFPB resorted to a “rushed and haphazard approach” to the rule. “The CFPB made this decision before conducting meaningful research or considering the real-world consequences of its actions,” Hill said.
For instance, the rule does not consider many of the costs of operating an overdraft program, including, “the cost of operating a call center and ignores the many other expenses involved such as ratifying and dealing with consumer disputes, mailing and postage for overdraft notices, third-party collection expenses, technology costs, and cost of regulatory compliance,” he added.
He continued, “The reality is that these additional costs make it increasingly difficult for banks to continue offering overdraft protection. Many will simply choose to stop providing the service altogether.”
However, House Financial Services Committee ranking Democrat Rep. Maxine Waters, D-Calif. said the rule does not ban overdraft fees or place a hard cap on them.
“It provides flexibility for large banks to charge more if their estimated costs and losses in providing this service are higher than $5,” she said. “The rule even allows big banks to charge higher fees if they provide a simple, up-front disclosure to consumers.”
She added that 97% of all banks and virtually all credit unions are exempt from the rule.
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