Congress Must Uphold CFPB Rule Limiting Overdraft Charges

AUSTIN, Texas—Texas Appleseed and the Network of Texas Industrial Areas Foundation (IAF) Organizations urge the Texas Delegation of the U.S. House Financial Services Committee to vote no on the resolution to overturn the Consumer Financial Protection Bureau (CFPB) Overdraft Fee Rule, the rule limiting excessive overdraft charges by large banks and credit unions.

The Network of Texas IAF Organizations, in its comment letter supporting the rule proposal, highlighted some of its members' harmful experiences with overdrafts. One community leader from El Paso noted, “Getting hit with overdraft fees happens to almost everyone I associate with.” Another person from Central Texas shared, “I ended up lending [my brother] money to eat,” because of financial strain caused by overdraft charges. A blog post that Texas Appleseed released when the rule was proposed highlighted a personal story about how high overdraft fees almost pushed a young person to abandon the banking system altogether.

On December 11, 2024, the CFPB issued a rule to cap overdraft fees at $5, with avenues to charge more based on true costs or through a line of credit with transparent terms. This measure closed a loophole that allowed banks to charge customers high fees, typically $35 per overdraft. It is expected to save the average person who is charged overdraft fees $150 or more per year. This rule represented a significant win for consumers, especially those who live paycheck to paycheck. 

Rosalie Tristan with Valley Interfaith and the Network of Texas IAF Organizations, shared, “We work across the state to support a good quality of life for Texans. Extracting high fees, often for small mistakes, hurts those most in need. This rule brings relief and predictability for the many Texans who are struggling to meet their basic needs.”

Now, these savings are in jeopardy. On March 5, 2025, the U.S. House Financial Services Committee will consider the Congressional Review Act resolution to overturn the CFPB Overdraft Fee Rule, which reduces overdraft fees from an average of $35 to $5. 

“With so many Texans living paycheck to paycheck, this rule offers an important safeguard, by reducing the financial harm caused by surprise fees,” said Ann Baddour, director of the Fair Financial Services Project at Texas Appleseed. “Overturning the CFPB’s Overdraft Fee Rule would be a detrimental step backward, and we urge members of the House Financial Services Committee to vote against this resolution.”

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The Network of IAF Organizations in Texas is a network of non-partisan institutionally based community organizations whose purpose is to train leaders to organize families around issues that affect their quality of life. The network includes Communities Organized for Public Service/ Metro Alliance, in San Antonio; Valley Interfaith in the Rio Grande Valley; The Metropolitan Organization in Houston; El Paso Interreligious Sponsoring Organization (EPISO), Central Texas Interfaith, Dallas Area Interfaith, The West Texas Organizing Strategy; Over 350 congregations and community organizations across Texas are represented in our organizations.

Texas Appleseed is a nonpartisan nonprofit focused on bringing about policies that are fair, just, and equitable for all Texans. Fueled by data, legal expertise, and a commitment to supporting vulnerable communities, our work has shaped hundreds of state and local policies and positively affected millions of Texans.