The CFPB Thursday issued its final overdraft rule, which caps overdraft program fees at $5 and applies to financial institutions, including credit unions, above $10 billion in assets. America’s Credit Unions and its members have consistently advocated against the bureau’s efforts that will severely restrict access to overdraft programs, and urged the bureau to rescind its proposal.

“We believe the CFPB has exceeded its authority under the law and are prepared to fight to prevent this rulemaking from taking effect. The bureau's ongoing abuse of power cannot be tolerated any longer. We urge Congress, and we will work with the Trump administration, to pursue reforms to the CFPB that are long overdue,” said America’s Credit Unions President/CEO Jim Nussle.

“With this final rule on overdraft protection programs, the CFPB is effectively telling consumers that their financial needs don’t matter if they don't fit the bureau’s political agenda and is seriously harming consumers who struggle with financial security. As we’ve repeatedly shared with the bureau and Director Chopra, credit unions offer overdraft programs because their members need this option to make ends meet. Credit unions work with their members to overcome financial challenges, but this final rulemaking will make financial services either less available or more expensive – for everyone across the country. 

“As a result of the rule, credit unions will be put in an impossible position. Some may no longer be able to offer an overdraft program because they lack the resources required to undertake the immense operational burden imposed by the rule or cannot afford to run their programs at a loss. This will only hurt and further disadvantage consumers.”

In addition to several letters America’s Credit Unions submitted on the issue, credit union witnesses testified before Congress on behalf of America’s Credit Unions this year, raising concerns about the bureau’s overdraft proposal:

• Karen Harbin, president and CEO of Commonwealth Credit Union in Frankfort, Ky., told members of a House Financial Services subcommittee that it could “inadvertently undermine the ability of smaller financial institutions like ours to offer services that are critical to our members' financial well-being;” and
• Karen Madry, president and CEO of Afena Federal Credit Union in Marion, Ind., explained to the Senate Banking Committee how it may undermine the ability of Afena and other smaller financial institutions to offer critical, needed services.

America’s Credit Unions will provide credit unions with additional insights into the final rule, and keep the industry updated on any efforts to stop it from taking effect. The rule is set to take effect Oct. 1, 2025.