Trump Signs Repeals of CFPB Overdraft, Digital Payment Rules

President Donald Trump officially repealed Biden-era Consumer Financial Protection Bureau rules capping overdraft fees and subjecting digital payment tools operated by companies such as Apple Inc. to agency supervision.

Trump signed the measures into law on Friday, eliminating two of former CFPB Director Rohit Chopra’s signature rulemaking efforts.

The House passed the measures repealing the CFPB’s $5 overdraft fee cap (S. J. Res. 18) and its larger participant rule for digital payment providers (S. J. Res. 28) last month, sending them to the president’s desk. The Senate passed both resolutions in March.

Lawmakers passed the measures under the 1996 Congressional Review Act, which allows a new administration and Congress to repeal rules finished in the waning days of a previous administration using only simple-majority votes in both chambers and the president’s signature.

Overdraft Cap

The CFPB’s overdraft rule, part of the Biden administration’s campaign against “junk fees,” would’ve generally required banks and credit unions with at least $10 billion in assets to cap fees at $5 when customers overdraw their accounts.

The rule was intended to slash the average $35 charge that Americans face for overdrawing—compared to debit-card overdrafts that typically cost less than $26, the agency said at the time. The rule could’ve slashed bank overdraft revenue by around $5 billion a year, the agency said.

Banking and credit union trade groups sued to block the rule hours after the CFPB finalized it in December.

Citigroup Inc. and Capital One Financial Corp. have eliminated overdraft fees altogether, while other large banks provide services such as account alerts and covering de minimis overdrafts to allow customers to avoid fees. Bank of America Corp. caps its overdraft fees at $10.

Payments Oversight

The larger participant rule for digital payment companies was meant to target Big Tech products such as Apple Pay and Alphabet Inc.'s Google Pay.

The rule, finalized in November, would’ve allowed CFPB examiners to determine whether digital payment providers processing at least 50 million transactions each year complied with the Electronic Fund Transfer Act and other federal consumer protection laws.

Trade groups representing tech giants including Apple and Google sued to block the rule in January.