CFPB's Overdraft Rule and Big Tech Payment Apps Rule Set for Repeal After Congressional Votes

Among other significant rulemakings that the CFPB finalized in the waning days of the Biden Administration were 1) an overdraft fees final rule that applies to banks and credit unions with more than $10 billion in assets, offering these financial institutions with several options to manage their overdraft lending program, and 2) a larger participant final rule to supervise larger nonbank companies that offer "general-use digital consumer payment applications" such as digital wallets, payment apps and peer-to-peer payment apps (which Holland & Knight previously reported on in a Nov. 22, 2024, alert and March 2025 article in The Banking Law Journal).

On March 5, 2025, the House Financial Services Committee voted 30-19 to pass H.J. Res 59, a Congressional Review Act (CRA) resolution sponsored by Committee Chairman Rep. French Hill (R-Ark.) that would overturn the CFPB's overdraft fees final rule. Senate Banking Committee Chairman Sen. Tim Scott (R-S.C.) introduced a similar CRA resolution, S.J. Res. 18, which was adopted in a 54-48 vote on March 27, 2025. The House of Representatives approved joint resolution S.J. Res. 18 in a closely divided but majority 217-211 vote on April 9, 2025.

Also on March 5, the U.S. Senate voted 51-47 to overturn the CFPB's larger participant consumer payment apps final rule. The disapproval resolution, S.J. Res. 28, was introduced by Sen. Pete Ricketts (R-Neb.) and Rep. Mike Flood (R-Neb.) pursuant to the CRA. The House of Representatives approved joint resolution S.J. Res. 28 in a similar closely divided but majority 219-211 vote on April 9, 2025, alongside the CRA resolution to repeal the overdraft rule.

Both CRA resolutions now head to President Donald Trump's desk. Though it is not clear how quickly he will sign these resolutions, he is expected to do so. If enacted, these measures would nullify the two rules and prevent the CFPB from issuing "substantially" similar rules in the future without fresh congressional authorization. President Trump signed 16 CRA resolutions in his first term and two so far in 2025.

Although the overdraft final rule was slated to take effect on Oct. 1, 2025, its potential repeal may have a somewhat limited impact. Since the CFPB announced its initiative to curb junk fees, multiple banks have begun reducing or eliminating overdraft fees, and the CFPB has pursued enforcement actions against large institutions in connection with overdraft fees. However, according to the CFPB, consumers have still paid a substantial amount in reported overdraft fees even with these changes.

With respect to the potential repeal of the CFPB's larger participant consumer payment apps final rule, the CFPB could still exercise its UDAAP (unfair, deceptive and abusive acts and practices) authorities and pursue violations of various consumer protection laws against Big Tech firms, as it has done previously. Additionally, the CFPB retains its supervision authority over nonbanks whose activities the CFPB has reasonable cause to determine pose risks to consumers regarding the offering or provision of consumer financial products or services.

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