SJRES 18: A joint resolution disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to "Overdraft Lending: Very Large Financial Institutions".

SJRES 18 in plain English: This joint resolution cancels a Consumer Financial Protection Bureau rule that would have regulated overdraft fees at very large financial institutions. The nullified rule would have required those banks to either cap overdraft charges at $5, justify a higher cap, or treat overdrafts as credit subject to lending disclosure laws. By passing this resolution, Congress blocks those requirements from taking effect.

Stated purpose

This joint resolution declares that Congress disapproves of the Consumer Financial Protection Bureau's December 2024 rule on overdraft lending at very large financial institutions, making that rule void and without legal effect.

Key points

• Cancels a CFPB rule published December 30, 2024, on overdraft lending at very large banks.
• The blocked rule would have capped overdraft fees at $5 for covered institutions.
• The blocked rule also would have required overdrafts treated as credit to follow Truth in Lending Act disclosure rules.
• Institutions would no longer be required to justify any higher overdraft fee cap under the nullified rule.

Arguments supporters make

• Overdraft services give consumers access to short-term funds in a pinch, and capping fees too low may cause large banks to eliminate overdraft coverage entirely, leaving people with fewer options.
• The CFPB rule exceeded the agency's proper authority by dictating specific fee amounts, and Congress has the right to rein in regulatory overreach that bypasses the normal legislative process.
• Banks must cover costs and risks when they cover overdrafts; eliminating market-set pricing could reduce competition and innovation in how financial products are offered.

Arguments opponents make

• Overdraft fees can cost consumers far more than $5 per transaction; the nullified rule would have saved low-income customers who rely on overdraft coverage significant money each year.
• Large financial institutions are highly profitable, and critics argue that high overdraft fees disproportionately burden people living paycheck to paycheck while padding bank revenues.
• Without this rule, consumers at very large banks have no federal cap on overdraft charges and no guarantee that overdraft products come with standard credit disclosures, reducing transparency.

Tradeoffs

Blocking the rule preserves banks' flexibility to price overdraft services as they choose and may protect access to overdraft coverage, but it removes a federal limit on fees that would have directly reduced costs for consumers who overdraw their accounts.

Current status in Congress: Became law.

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