Passed
217 Yea211 Nay5 Not voting1/2 required
SJRES-18-119
Became Public Law No: 119-10.
Sponsored by Tim Scott (R-SC)
What it does
This law, enacted May 9, 2025 under the Congressional Review Act, cancels the Consumer Financial Protection Bureau's (CFPB) final rule on "Overdraft Lending: Very Large Financial Institutions" (published December 30, 2024). That rule would have capped overdraft fees at banks with $10 billion or more in assets. By disapproving the rule, Congress nullifies it entirely, and the rule has no legal force or effect. Under the Congressional Review Act, the CFPB is also prohibited from issuing a substantially similar rule in the future without new congressional authorization.
Who benefits
Large banks and credit unions with over $10 billion in assets, which can continue charging overdraft fees without the federal cap the CFPB rule would have imposed. Shareholders and investors in those institutions who benefit from fee revenue. Smaller banks and credit unions already exempt from the rule, who face no competitive disadvantage from a cap applied only to large institutions. Financial industry trade groups that opposed the rule.
Who is hurt
Consumers — particularly lower-income account holders — who frequently incur overdraft fees and would have benefited from the cap. The CFPB estimated the rule would have saved consumers approximately $5 billion annually in overdraft fees. Consumers with limited banking options who rely on large banks and have fewer alternatives. Consumer advocacy organizations that supported the rule. CFPB, which loses rulemaking authority in this specific area going forward.
Supporters argue
Supporters argue that the CFPB's overdraft rule exceeded the agency's statutory authority and amounted to price control on a voluntary financial service, not a traditional lending product. They contend that overdraft services provide a genuine safety net for consumers who need short-term liquidity, and that capping fees would cause large banks to eliminate or restrict overdraft programs — leaving low-income customers with fewer options and potentially pushing them toward higher-cost alternatives like payday loans. They also argue the rule was issued in the final weeks of the prior administration without adequate consideration of market consequences.
Opponents argue
Opponents argue that the CFPB's rule was grounded in clear statutory authority under the Truth in Lending Act and the Dodd-Frank Act, and that overdraft fees — averaging $35 per transaction — disproportionately burden low-income consumers who can least afford them. They contend the CFPB's own data showed the rule would have saved consumers roughly $5 billion per year, and that blocking it prioritizes bank fee revenue over measurable consumer financial relief. They further argue that the Congressional Review Act's prohibition on substantially similar future rules permanently removes a consumer protection tool from regulators.
Constitutional context
This law uses the Congressional Review Act to nullify an agency rule, which is a direct exercise of Congress's Article I legislative power and raises no novel constitutional issue on its face. However, the underlying CFPB rule touched on active post-Loper Bright (2024) questions: courts now independently assess whether agency rules have clear statutory authorization, and the CFPB's authority to classify overdraft fees as "credit" subject to Truth in Lending Act regulation was already being contested in litigation.
Checks and balances
Congress gains authority by nullifying an executive agency rule and permanently restricting the CFPB's future rulemaking in this area; the primary check is presidential veto power, which was not exercised here, and future judicial review of any related agency action.
Historical precedent
Congress previously used the Congressional Review Act to nullify a CFPB rule in 2018, when it disapproved the CFPB's arbitration rule that would have allowed consumers to bring class-action lawsuits against financial institutions.
Passed
Joint Resolution Passed (52-48)
Motion to Proceed Agreed to (52-47)