Senate Votes to Overturn CFPB Overdraft Rule: What It Means for Credit Unions

Posted by Gracie Nelson on March 28, 2025

Today, the Senate voted 52-48 to overturn the Consumer Financial Protection Bureau’s (CFPB) overdraft fee rule. If finalized, it would not only repeal the current rule but also prevent future administrations from implementing a substantially similar rule. This means that when the Bureau reissues the statutorily required rule, it will have to be different from the rule that was finalized in December.

The Impact of the Overdraft Rule on Credit Unions

The CFPB’s overdraft rule was part of a broad rulemaking agenda that requires financial institutions with more than $10 billion in assets to adopt one of three pricing structures for overdraft fees: a $5 flat fee, a cost-recovery-based fee, or a disclosed overdraft loan structure.

For many credit unions, overdraft protection is an essential service that provides members with financial flexibility and stability. Despite the proposed threshold, the rule would impact all financial institutions due to marketplace competition driving the cost down. The rule failed to account for the unique role credit unions play in offering low-cost, member-focused overdraft options that differ substantially from those provided by banks and payday lenders.

GoWest’s Advocacy Efforts

Since the CFPB first introduced this rule, GoWest has worked to advocate on behalf of credit unions, ensuring policymakers understood the negative consequences of the rule. Our advocacy efforts included direct engagement with the CFPB, submitting formal comments, and targeted engagement with congressional leaders.

Looking Ahead

Should Congress invalidate this rule credit unions can anticipate more certainty in their overdraft programs. The Trump Administration and Congress continue to review rules that were passed during the Biden Administration.  Aimed at curtailing some of the more egregious actions taken by the CFPB, key legislative efforts such as the TABS Act, The CID Reform Act, and The Rectifying UDAAP Act are gaining traction, signaling a broader push for regulatory reform.

Click to read GoWest’s analysis of the House Subcommittee  on Financial Institutions Hearing.

GoWest remains committed to ensuring the credit union voice is heard in these ongoing discussions. We will continue to monitor legislative developments and advocate for policies that protect credit unions’ ability to serve members effectively. If you have questions or concerns, please reach out to John Trull at [email protected] or Gracie Nelson at [email protected], or the advocacy team.

Posted in Advocacy on the Move, Regulatory Advocacy.