CRS Reviews Congressional Repeal of CFPB Overdraft Rule

The Congressional Research Service ("CRS") reviewed the purpose and history of the Consumer Financial Protection Bureau’s ("CFPB") overdraft fee rule. Congress overturned the rule by joint resolution under the fast-track legislative procedures of the Congressional Review Act ("CRA"). 

In its report, the CRS explained that an overdraft occurs when a financial institution pays a transaction that exceeds the funds in a consumer’s account. The typical fee charged is $35. To address these costs, the CFPB finalized a rule that would have capped overdraft fees at $5, or at a higher level if banks could demonstrate actual costs, or alternatively, to treat the overdraft as credit subject to Truth in Lending Act disclosure rules. The overdraft fee rule would have applied to banks and credit unions with more than $10 billion in assets. (See related coverage.)

Congress "disapproved" the rule in May 2025 by joint resolution under the CRA. The CRS said that industry groups opposed the rule, arguing it exceeded the CFPB’s authority, would limit access to certain bank accounts, and could drive some consumers toward payday loans. The CRS stated that while overdraft fee revenue has declined by nearly half in recent years, the CFPB projected the rule could have saved consumers up to $5 billion annually, particularly frequent over-drafters.

The CRS noted that the CRA permanently bars the CFPB from issuing a rule in "substantially the same form," a phrase undefined in statute and untested in court, creating uncertainty over the agency’s ability to regulate overdraft fees in the future.