Dear Community Banker,
Despite the 2024 election results and the decision by most regulators to hold back on major rulemakings given the transition of administrations, the Consumer Financial Protection Bureau today issued its final rule on overdraft services.
Unfortunately for the consumers this misguided rulemaking is intended to help, the bureau’s final rule would harm consumers and businesses that rely on overdraft services. This egregious rule would cause a surge in rejected payments while forcing consumers to rely on payday lenders and other unscrupulous funding sources—creating unnecessary harm in local communities across the nation.
Further, as ICBA made clear to the CFPB in our comment letter on the rulemaking, the overdraft rule exceeds the bureau’s statutory authority under the Truth in Lending Act and violates existing regulations that have determined overdrafts are not extensions of credit. Clearly, this rulemaking does not stand up to close scrutiny.
This rule does not reflect “consumer protection.” In fact, it will have a detrimental impact on millions of consumers. But make no mistake: ICBA is in close contact with policymakers—including the incoming administration and Congress—to reject and overturn this harmful rulemaking.
Thank you for all of your efforts to push back against this and other harmful rulemakings under the CFPB, and let’s continue fighting to oppose this rulemaking at the 11th hour of the outgoing administration.
