President Donald Trump on May 9, 2025, signed into law measures to eliminate two CFPB rules established under the Biden Administration.
The first rule repealed was the CFPB's Overdraft Rule, one aspect of the Biden Administration's attempt to eliminate "junk fees," which applies to banks and credit unions with more than $10 billion in assets, offering these financial institutions several options to manage their overdraft lending program. The Overdraft Rule was estimated to reduce bank overdraft revenue by nearly $5 billion per year.
The second rule repealed was the larger participant final rule to supervise larger nonbank companies that offer "general-use digital consumer payment applications" such as digital wallets, payment apps and peer-to-peer payment apps (Payment Apps Rule) finalized by the CFPB in November 2024.
The initiative to repeal the rules followed challenges by industry groups in U.S. federal courts. As previously reported by Holland & Knight, on March 5, 2025, the House Financial Services Committee voted 30-19 to pass H.J.Res 59, a Congressional Review Act (CRA) resolution that would overturn the Overdraft Rule. Senate Banking Committee Chairman Tim Scott (R-S.C.) introduced a similar CRA resolution, S.J.Res. 18, which was adopted in a 54-48 vote on March 27, 2025. The House of Representatives approved joint resolution S.J.Res. 18 in a closely divided but majority 217-211 vote on April 9, 2025.
Also on March 5, the U.S. Senate voted 51-47 to overturn the Payment Apps Rule. The disapproval resolution, S.J.Res. 28, introduced pursuant to the CRA by Sen. Pete Ricketts (R-Neb.) and Rep. Mike Flood (R-Neb.), was approved by the House in a similar closely divided but majority 219-211 vote on April 9, 2025, alongside the CRA resolution to repeal the Overdraft Rule.
This action by the Trump Administration is one of its latest attempts to curtail the scope of the CFPB's oversight and scrutiny of entitles bound by federal consumer protection laws. While agency leaders continue to scale back the CFPB's operations, Trump and Republican members of Congress appear to be on the path to pursuing the same goal.
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