Congressional Resolutions Aim to Overturn CFPB’s Overdraft Rule

Representative French Hill (R-Ark.), Chairman of the House Financial Services Committee, and Senator Tim Scott (R-S.C.), Chairman of the Senate Banking Committee, introduced Congressional Review Act (CRA) resolutions last week aiming to overturn the Consumer Financial Protection Bureau’s (CFPB) final rule capping overdraft fees.

“The CFPB’s actions on overdraft is another form of government price controls that hurt consumers who deserve financial protections and greater choice,” Hill said in a press release. “Our CRA will help overturn this harmful rule and is a next step toward ensuring the CFPB halts all ongoing rules until it answers to Congress, just like any other non-independent federal agency.”

Scott introduced the CRA resolution in the Senate, and said that the CFPB targeted “legitimate payment incentives and practices.”

“The overdraft rule was yet another example,” Scott continued. “Many consumers rely on overdraft services to make ends meet and limiting this practice will push Americans to riskier financial products.”

The CRA allows Congress to review federal agencies’ rules and enact a resolution of disapproval that would render the rule ineffective. In December, the CFPB released its overdraft fee regulations for banks and credit unions with assets exceeding $10 billion, stating that it hoped to close an “outdated overdraft loophole” in lending laws.

The rule is set to take effect October 1, 2025 and will require financial institutions to choose one of three options for their overdraft policies: cap overdraft fees at $5, set fees to only cover costs and losses, or follow standard lending laws like interest rate disclosures.

PYMNTS noted that when the CFPB’s overdraft rule was proposed, three banks and four trade associations filed a lawsuit alleging that the bureau overstepped its regulatory authority and that it did not consider how the rule could potentially harm consumers.