WASHINGTON—President Trump Friday signed a Congressional Review Act resolution that overturns the CFPB's overdraft rule, officially eliminating a regulation that had raised concerns among many financial institutions about the future of their overdraft programs.
Dennis Dollar
The CFPB’s final rule, issued late last year, limited overdraft charges to $5 for FIs above $10 billion in assets. As CUToday.info has extensively reported, analysts predicted the CFPB's overdraft limit would trickle down to all FIs through competitive pressure, possibly forcing some credit unions and banks to discontinue the service. The rule was set to take effect on Oct.1, 2025.
Former NCUA Chairman Dennis Dollar, in a previous CUToday.info report, emphasized the impact of overturning the CFPB's OD rule.
"The importance of...a congressional overturn of the CFPB’s overdraft rule is that it completely takes the rule off the books—not simply delays its enforcement by executive action only to have it put back into play in the future under a new administration with a more activist CFPB director,” stated the principal partner at Dollar Associates out of Birmingham, Ala. “This congressional repeal means that a future CFPB will have to go back through the entire rulemaking process, knowing that the rule has been overturned by Congress previously as an overreach of agency authority."
Lasting Impact
Although the rule has been repealed, its impact on the overdraft market appears to be lasting. Analysts note that many financial institutions significantly reduced—or completely eliminated—overdraft fees in response to the regulation, creating competitive pressure and permanently lowering prices.
Michael Moebs
According to the latest Moebs $ervices survey in early April, the average overdraft fee in the U.S. is now below $19, compared to nearly $28 before the rule was passed. This represents 74.8% of the national market of over 634 million checking accounts in the Moebs survey.
“The price of overdrafts has truly fallen dramatically,” said Michael Moebs, chair of Moebs $ervices. “Over 20 years ago Moebs $ervices was encouraging FIs to drop their OD price to $15 or less. What we foretold is now happening.”
Trump's signature, too, is unlikely to deter continued criticism of high overdraft fees from consumer advocates and members of Congress. As reported by CUToday.info, Senator Elizabeth Warren (D-MA) recently urged the Department of Defense to suspend a contract between the U.S. Marine Corps and $1.5-billion Frontwave Credit Union, citing what she described as “excessive” overdraft charges.
The Defense Credit Union Council commended Trump for his “decisive action” the trade group said restores balance to federal regulation and protects the financial wellbeing of military members, veterans, and their families.
Anthony Hernandez
“DCUC applauds President Trump and Congress for standing up for responsible overdraft protection programs that our members depend on,” said Anthony Hernandez, DCUC president/CEO. “Military families often face unique financial challenges, especially during deployments or relocations. Overdraft services provide a critical safety net that helps them manage unexpected expenses and maintain financial stability.”
Direct Threat To Financial Wellbeing
The CFPB’s now-repealed rule, which targeted overdraft fees at large financial institutions, would have inadvertently limited access to essential financial tools for service members and veterans, DCUC said. The trade group has consistently opposed this rule, arguing that it posed a direct threat to the financial wellbeing of millions of Americans, particularly those in vulnerable and underserved communities.
Jim Nussle
“This repeal is a victory for common-sense regulation and the financial security of our military and veteran communities,” Hernandez added. “DCUC remains committed to advocating for policies that support the unique needs of those who serve our country.”
DCUC thanked Senator Tim Scott (R-SC) and Representative French Hill (R-AR) for their “leadership” in introducing the joint resolution (S.J. Res. 18) to repeal the CFPB’s overdraft rule.
“Their bipartisan efforts were instrumental in advancing this critical legislation through both chambers of Congress,” DCUC said.
America’s Credit Unions applauded Trump’s decision.
“America’s Credit Unions is appreciative that credit unions will be able to continue to offer responsible overdraft programs,” said America’s Credit Unions President/CEO Jim Nussle. “With President Trump’s signature, the overly broad CFPB rule is now nullified. Credit unions provide their members with solutions to challenging financial problems every day and overdraft protection is one of those valuable solutions that credit union members can benefit from.”