President Trump has signed into law a resolution by Chairman Tim Scott (R-S.C.) that overturns a rule from the Biden-era Consumer Financial Protection Bureau (CFPB) concerning overdraft fees. The original rule imposed price controls on these fees, which, according to Scott, would have reduced access to credit and financial services for many Americans.
“The Biden administration’s ill-conceived rule imposing new price controls on overdraft services provided by banks and credit unions harmed the very consumers the CFPB is supposed to protect,” said Chairman Scott. He added that the rule could have led to more unbanked Americans and fewer options for consumers.
The process leading up to this legislative change began in November 2024 when Chairman Scott urged the White House to halt all rulemaking activities related to financial regulations. Despite his requests, CFPB Director Rohit Chopra proceeded with finalizing the overdraft rule in December 2024, prompting opposition from Scott.
In February 2025, both Chairman Scott and House Financial Services Committee Chairman French Hill (R-Ark.) introduced resolutions under the Congressional Review Act (CRA) aiming to overturn the CFPB’s decision. Several key stakeholders supported this move, including organizations such as the Consumer Bankers Association and America’s Credit Unions.
The Senate passed Scott’s resolution on March 27, 2025, followed by approval from the House on April 9, 2025. During discussions preceding these votes, concerns were raised about potential negative impacts of the CFPB’s rule. As noted by The Wall Street Journal Editorial Board: “Sen. Scott cited a Federal Reserve Bank of New York study that found such caps ‘hinder financial inclusion’ because ‘banks reduce overdraft coverage and deposit supply.’”
With President Trump’s signature now affixed to this resolution, it marks an official reversal of what some viewed as restrictive financial regulation under President Biden’s administration.
