NEWS: President Trump has signed a joint congressional resolution that officially repeals the Consumer Financial Protection Bureau (CFPB) rule capping overdraft protection fees.
The House passed S. J. Res. 18, repealing the CFPB’s $5 overdraft fee cap last month, on a 217-211 vote. The Senate voted 54-48 to pass the resolution in March.
The 1996 Congressional Review Act (CRA) allows a new administration and Congress to repeal rules finished in the waning days of a previous administration using only simple-majority votes in both chambers and the president’s signature. Under the CRA, when a joint resolution of disapproval like this one is enacted, no “substantially similar” regulation can later be enacted without congressional authorization.
This Compliance Courier explained that the rule, which would have taken effect on Oct. 1, 2025, would have only applied directly to “very large financial institutions,” meaning insured credit unions and other depository institutions with total assets of more than $10 billion. Those institutions would have had three options when charging for paying items that otherwise would have caused an overdraft:
- Capping their overdraft fee at $5;
- Capping their fee at an amount that covered their costs and losses, calculated by using a standard found in the rule; or
- Disclosing the terms of their overdraft loan, using Truth in Lending disclosures.
When the rule was proposed, The League submitted a comment letter opposing it. Even though it would not have applied directly to any Wisconsin credit unions, we explained that credit unions of every size would have faced market pressure to comply with the rule. We felt that not enough had been done to study the rule’s impacts on smaller financial institutions.
With the president’s signature, the overdraft fee rule is nullified, and credit unions do not have to worry about complying with it.