In a multi-front fight against the CFPB’s overdraft rule, America’s Credit Unions joined financial services trades in urging Congress to quickly pass a motion of disapproval nullifying the rule through the Congressional Review Act. Senate Banking Committee Chairman Tim Scott, R-S.C., and House Financial Services Committee Chairman French Hill, R-Ark., introduced the resolutions Thursday.

The rule would cap overdraft fees at $5 for financial institutions with more than $10 billion in assets.

“If not invalidated, former Director Chopra’s final rule will effectively bring an end to overdraft services for consumers who have few, if any, other options for meeting short-term liquidity needs,” the organizations wrote in the letter sent Friday. “Moreover, the rule goes well beyond the agency’s statutory authority, reversing 55 years of consistent interpretation of the Truth in Lending Act and Regulation Z by the agencies charged with enforcing the statute and by the courts that have ruled on its scope, all to advance the previous administration’s political campaign against ‘junk fees.’”

The letter adds:

• The Electronic Fund Transfer Act and its implementing regulations provide consumers with a choice at account opening to opt into their financial institution’s overdraft program and be charged a fee for overdrafts for debit card transactions at ATMs or points of sale at merchants;
• Overdraft fees are well disclosed by financial institutions when an account is opened, as required by law. If an overdraft fee is assessed, a financial institution is required to clearly disclose the fee on the monthly statement along with notices of the consumer’s ability to opt out of the service; and 
• Many financial institutions have gone beyond what is required by law and adopted a simple, easy-to-read disclosure that informs consumers of all fees associated with any checking account, how those fees are assessed, and how they can be avoided.

America’s Credit Unions filed a legal challenge against the rule the day it was finalized, and 18 states’ leagues and associations filed a brief in support of the challenge.

The rule is scheduled to become effective in October. The CFPB, now under a new acting director, filed a motion last week to delay the rule’s effective date until Dec. 30.