With the House Financial Services Committee set to mark up its resolution of disapproval for the CFPB’s overdraft rule Wednesday, America’s Credit Unions President/CEO Jim Nussle emphasized how the rule would harm consumers in a letter sent prior to the markup. Resolutions to void the rule via Congressional Review Act have been introduced in both the House and Senate.

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

“Quite simply, the final rule is impractical. Applying Truth in Lending Act and Credit Card Accountability Responsibility and Disclosure Act provisions to overdraft is not viable for credit unions,” the letter reads. “Reducing fees to a breakeven amount would force covered credit unions to remove crucial services, would tighten eligibility standards and remove access to overdraft for those who need it most, and would cause some financial institutions to remove overdraft protection altogether.”

The letter notes that despite the rule’s its asset threshold it would impact exempt institutions in much the same way as covered institutions, “but with the thinner margins of smaller institutions, would lead to a higher incidence of removal of overdraft protection.”

This would have result in detrimental impacts to credit unions through increased consolidation, reduced ability to serve underserved areas, and reduced relationship banking as well as removing the stepping-stone to financial inclusion that overdraft protection often represents.

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.