Senate passes resolution to void CFPB overdraft rule
Congress took the latest step to nullify the CFPB’s overdraft rule with the Senate voting 52-48 Thursday to advance a resolution of disapproval on the rule. The resolution would prevent the rule, which caps overdraft fees at $5 for financial institutions with more than $10 billion in assets, from going into effect via the Congressional Review Act. It must pass the House and be signed by the president to take effect.
“America's Credit Unions supports using all tools available to pull back any overreach of the CFPB's statutory authority,” said America’s Credit Unions President/CEO Jim Nussle. “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. Credit unions are the original consumer protectors that are serving forgotten communities across the country. We appreciate the Senate's action to stop regulatory overreach and preserve necessary financial products and services for hard working Americans."
The House Financial Services Committee passed its resolution of disapproval earlier this month but it still must go to the House floor for a vote.
The White House issued a Statement of Administration Policy supporting the resolution prior to the vote, noting the president’s advisors would recommend he sign the resolution into law in its current form.
“This rule, issued as a midnight regulation in the final days of the previous Administration, would result in six million consumers facing higher fees and more bounced checks. It also limits consumer choice by depriving Americans of the option to choose overdraft services to meet short-term liquidity needs, forcing them into higher-cost financial products. Overturning this rule would advance this Administration’s deregulatory agenda,” the statement reads.
America’s Credit Unions is pursuing all avenues to push back against the overdraft rule finalized in December. It would cap overdraft fees at $5 for financial institutions with more than $10 billion in assets. America’s Credit Unions filed a legal challenge the same day seeking to overturn the rule, and 18 states’ leagues and associations filed a brief in support of the challenge.