Resolution Blocks New CFPB Rule Limiting Overdraft Fees at Large Banks

This joint resolution takes direct aim at a recently finalized rule from the Consumer Financial Protection Bureau (CFPB), specifically the one titled "Overdraft Lending: Very Large Financial Institutions" (found in 89 Fed. Reg. 106768). If enacted, this resolution would effectively nullify that rule, preventing it from taking effect or having any future force.

Undoing the Overdraft Overhaul

The core function of this resolution is straightforward: it disapproves the CFPB's regulation designed to curb certain overdraft practices at the nation's largest banks and credit unions (those with over $10 billion in assets). The CFPB rule aimed to impose new guardrails on how these institutions charge overdraft fees, potentially limiting costs for consumers who occasionally overdraw their accounts. By disapproving the rule, this resolution stops those specific federal consumer protections related to overdrafts at large institutions before they start.

The Bottom Line for Bank Customers

What does blocking this rule mean for regular people? Primarily, it means the status quo regarding overdraft fees at major banks remains unchanged by this specific federal action. The CFPB's intended limits or changes to fee structures won't be implemented. For individuals, particularly those who might live paycheck-to-paycheck or occasionally rely on overdraft to cover unexpected expenses, this means they won't see the potential relief or altered fee landscape that the CFPB rule was designed to create. Concerns exist that without these regulations, consumers might continue to face significant costs from overdraft fees, which can disproportionately affect those with lower balances or less predictable income.

Regulatory Landscape Reset

While the resolution could mean less regulatory compliance work for the very large financial institutions targeted by the original rule, it also removes a layer of consumer financial protection focused on a common pain point: overdraft charges. The CFPB rule represented an effort to standardize practices and potentially lower costs in this area. Its disapproval means that any federal-level changes to these specific overdraft practices at large banks are halted, leaving existing state laws and the banks' own policies as the primary regulators of these fees.