WASHINGTON—The House Wednesday passed, by a 217-211 vote, Senator Tim Scott’s (R-SC) joint resolution (S.J. Res. 18) to repeal the CFPB’s overdraft rule, “Overdraft Lending: Very Large Financial Institutions.”
The resolution, which quickly gained bipartisan support, passed the Senate last month by a vote of 52-48 before advancing to the House for final approval.
The Defense Credit Union Council DCUC applauded the outcome, noting it has consistently opposed the CFPB overdraft rule since it was first proposed in December 2024, which applies to financial institutions with more than $10 billion in assets.
The rule mandates that these institutions either cap most overdraft fees at $5 or classify overdraft programs as credit under the Truth in Lending Act (TILA).
Beyond imposing unnecessary restrictions, DCUC added it has shared how the rule creates significant compliance challenges for credit unions. See DCUC’s letters on this issue here.
Reclassifying overdraft protection as a credit product under TILA would require costly system overhauls, additional disclosures, and extensive compliance measures, despite members having already opted in with an understanding of the terms. This regulatory strain creates uncertainty for many credit unions and jeopardizes their ability to effectively serve their communities, DCUC said.
Last month, DCUC commended Senator Scott’s leadership in introducing this resolution and bringing it before the Senate. Today, DCUC extends its appreciation for the House’s swift action in supporting this critical measure.
"We are grateful for Senator Scott’s leadership in protecting consumers, restoring regulatory balance, and preserving access to fair, flexible financial services," said Anthony Hernandez, DCUC president/CEO. "DCUC remains steadfast in advocating for the financial well-being of service members, veterans, and their families."
ACU Responds
America's Credit Unions emphasized that it supports using all tools available to “pull back any overreach" of the CFPB's statutory authority.
"The Bureau's overdraft rule is a solution in search of a problem, an attempt to eliminate a product deemed 'unsuitable' by Washington bureaucrats but vital to many credit unions’ members,” said Jim Nussle, America’s Credit Unions president/CEO. “Credit unions are the original consumer protectors that are serving forgotten communities across the country. We appreciate the House's action to stop regulatory overreach and preserve necessary financial products and services for hard-working Americans.”
ABA Reacts
The American Bankers Association, too, applauded the bill’s passage.
“We thank House Financial Services Committee Chairman French Hill and Senate Banking Committee Chairman Tim Scott for their leadership on this important issue,” said Rob Nichols, ABA president and CEO. “Consumers have indicated time and time again that they value and appreciate this highly regulated service and don’t want banks to discontinue offering it because of a rule that imposes unlawful government price caps. Congress has acted decisively to right that wrong and ensure America’s banks can continue offering this important, optional service consumers rely upon to meet their short-term financial needs. We appreciate the administration’s support and look forward to President Trump quickly signing this resolution into law.”