WASHINGTON–The House has passed a joint resolution designed to repeal the CFPB’s overdraft rule, which credit unions oppose.

The resolution, originally passed in the Senate and brought by Sen. Tim Scott (R-SC) , is titled “Overdraft Lending: Very Large Financial Institutions,” passed the house on a 217-211 vote, largely along party lines. It earlier passed the Senate 52-48.

The legislation is in response to the CFPB’s overdraft rule, which applied to institutions of more than $10 billion and which would have mandated covered institutions either cap most overdraft fees at $5 or classify overdraft programs as credit under the Truth in Lending Act (TILA).

Additional Pushback

In opposition, credit unions argued, among other things, that the caps would not be limited to the largest FIs and would instead affect  all providers. 

In addition, CUs told Congress that reclassifying overdraft protection as a credit product under TILA would require costly system overhauls, additional disclosures, and extensive compliance measures, even though members had already opted in