Overdraft Rule Repealed: A Regulatory Win for Credit Unions

Posted by Gracie Nelson on May 12, 2025

President Trump has signed the Congressional Review Act resolution repealing the Consumer Financial Protection Bureau’s (CFPB) Overdraft Rule. The resolution fully nullifies the rule and prevents the CFPB from issuing a substantially similar regulation in the future without undergoing a new rulemaking process.

This marks a significant regulatory win for credit unions and a direct result of the strong, coordinated advocacy efforts of GoWest member credit unions.

Overdraft Rule Recap

Finalized in late 2024, the CFPB’s rule aimed to cap overdraft fees at $5 for financial institutions with more than $10 billion in assets. However, the rule risked the creation of downward pressure on smaller financial institutions, potentially forcing them to modify or eliminate overdraft programs altogether. This would have limited access to safe, transparent short-term liquidity options, especially for members who might otherwise turn to high-cost or predatory alternatives.

GoWest Advocacy

In March 2024, GoWest submitted a formal comment letter to the CFPB outlining the potential consequences of the overdraft rule. The letter emphasized the need to preserve operational flexibility for credit unions and underscored the value of overdraft programs as tailored, responsible services that meet the unique needs of their members.

Beyond the comment process, GoWest worked to elevate these concerns on Capitol Hill. Credit union leaders from the GoWest region engaged directly with lawmakers to advocate for a more balanced and industry friendly approach to overdraft regulation. These efforts increased congressional awareness of the rule’s unintended consequences and were instrumental in building the bipartisan support that led to its repeal.

Conclusion

GoWest remains committed to advocating for regulations that reflect the unique structure and mission of credit unions—providing affordable, accessible financial services that prioritize members’ financial well-being. As the regulatory landscape continues to evolve, GoWest will remain actively engaged to ensure future rules strengthen your ability to serve your communities.

Posted in Advocacy on the Move, Regulatory Advocacy.